“Woke” capitalism is one of the worst developments of the past few years.
Companies were supposed to be a bulwark against zany far-left ideas, but now they are embracing them.
And Greg Abbott just got one major firm to make an infuriating admission about “woke” capitalism.
A common refrain from conservatives and moderates was that liberal college students would grow out of their goofy ideas once they got a job and entered the “real world.”
The problem is that radical leftists have moved into the “real world,” and they’ve slowly turned it into the college campus.
Major corporations are just as likely to push wokeness as a government agency.
One of the outcomes of that transition is a move toward stakeholder capitalism over shareholder capitalism.
Shareholder capitalism means that companies have a fiduciary responsibility to the people who own shares in the company, but stakeholder capitalism suggests that firms have a duty to do what’s best for all stakeholders, namely everyone.
State Street CIO admits ESG is a “constraint” on business investment
An outgrowth of stakeholder capitalism is a new focus on ESG (Environmental, Social, and Governance) goals, meaning companies are rewarded or punished based on how environmentally or socially “woke” they are.
But forcing companies to satisfy ESG scores is bad for business, and one major executive publicly admitted it.
Lori Heinel, Chief Investment Officer of State Street, a major global wealth management firm, blew the whistle on corporations pursuing ESG goals.
During a Texas Senate Committee on State Affairs hearing, Heinel said, “We hold deeply that the primary reason for a corporation to exist is to generate profits and to generate returns for its shareholders, so we are absolutely steadfast in that…We are actually quite concerned about the rise of stakeholder capitalism as a class of investing…Over the years, we’ve debated whether ESG is a performance enhancement, and as CIO, I’ve been steadfast in saying by definition, imposing a constraint on a portfolio—if you just do basic investment principles—that’s a constraint. And so I’ve steadfastly encouraged our teams to not think of ESG as a performance enhancer…”
🚨 @StateStreet Global Chief Investment Officer Lori Heinel admits ESG is *NOT* a performance enhancer:
— Will Hild (@WillHild) December 15, 2022
The hearing came after Texas Republican Governor Greg Abbott signed a law in 2021 to stop the Lone Star State from spending public dollars with companies that push it.
Texas was the first state to ban BlackRock from doing business with our state.
I signed a law in 2021 to ban financial companies that have ESG policies that discriminate against the oil & gas sector.
That includes BlackRock and several other financial companies. https://t.co/AkXMYfAShh
— Greg Abbott (@GregAbbott_TX) December 1, 2022
ESG policies lose money for everyone except the crony firms set up to receive government business because of them or those businesses whose competitors would be unable to survive the cost of complying with the policies.
Whichever the case, the result is consumers get less choice and higher costs so the firms leaching off ESG policies are the only ones with any financial reason to pursue it.
Sadly, much of the public continues to buy into the Left’s ESG charade pushed under the guise of reaching some supposed utopia if only more of their radical ideological agenda were adopted.
However, not all companies are going to willingly bleed money to further enrich a handful of globalist elites and their cronies.
As ESG continues to lose money for firms, common sense will hopefully eventually take over.
In the meantime, leftist business elites like Larry Fink, CEO of global wealth management behemoth BlackRock, continue to cheer their supposed ideological commitments to ESG, and he’s using his firm’s considerable resources to strongarm companies into complying with ESG.
But as the Texas committee hearing proved, principled elected officials are beginning to take a stand against the ESG scam.
Stay tuned to Unmuzzled News for any updates to this ongoing story.