by DIANE HARDY || If you haven’t heard much about ESGs, you will soon. The Mom and Pop Alliance of South Carolina has been hard at work this legislative session educating state lawmakers (and providing proposed legislation) on this critical issue.
ESGs are a social credit scoring system designed to measure compliance on three left-leaning interests (Environmental, Social Justice and Governance). ESGs have exploded on the business scene over the past decade, contributing to the ubiquitous “corporate wokeism” we have been witnessing, but shockingly ESG scores are now being applied to INDIVIDUALS as well.
As explained in a recent article from Impact Investor, “It is similar to a credit score … but, instead of rating creditworthiness, it rates a person’s ESG risk … while it may sound like tales out of China, it is a system that is, in fact, being implemented in the US and soon many other nations.”
With the stated purpose of rewarding actions that help move the world toward sustainability and equity, new rules will tie your personal ESG score to your ability to secure lending. This ESG platform is designed to score you on a plethora of metrics including your purchase history, charities you support, travel, energy use, food consumption etc. Lenders will use this system to choose who they extend services or credit to because they themselves are also being graded on these metrics. Companies with a high score gain favor with governments and large banks.
According to Green Business Bureau, a strong ESG score will help businesses build trust with governments, thus making them more likely to award access, approvals and licenses for new opportunities. They further explain that a strong ESG strategy will reduce the risk of regulatory intervention, government interference, and sanctions. Additionally, according to ESG reporting firm Givewith, “government agencies are beginning to use ESG scores to grant businesses permission for land, water, electricity and a variety of crucial resources, based on how ethical and responsible their ESG scores indicate.”
Clearly businesses that don’t toe the line may very well be out of business. So, if you have ever wondered why so many companies have recently gone “woke,” here’s your answer. For some it is a true belief in the causes of social justice and climate change, for others it is a way to cloak themselves in righteousness to hide their other atrocities (such as using slave labor), and for many others it is for economic survival as governments and banks hold more and more control over them in this alarming public-private “partnership.”
At this point you are probably wondering who is doing this and why?
As to WHO, the list is very long, but includes many large U.S. corporations, the United Nations, the International Monetary Fund (IMF) and especially the World Economic Forum (WEF), among others. The WHY is to convert our capitalistic system to STAKEHOLDER CAPITALISM or COLLECTIVIST CAPITALISM, which of course isn’t capitalism at all. In the words of Klaus Schwab, founder of the WEF “… every industry, from oil and gas to tech must be transformed … in short, we need a great reset of capitalism.”
In this system the elites will make the rules regarding how one stays in compliance, which can change arbitrarily. We keep hearing the phrase “the end of democracy.” Well, this is it with the loss of our representative government. Thankfully, following Mom and Pop Alliance’s visit to the S.C. Senate and State House of Representatives on February 1, several elected officials took action on the information we provided to them.
State representative Anne Thayer has introduced legislation (H. 4978) which would discourage banks and financial institutions from making lending decisions based on anything other than financial concerns, imposing steep fines for any discrimination based on subjective or arbitrary standards.
S.C. Senator Josh Kimbrell also spoke on the Senate floor on February 24 on the “critical importance of our state taking steps to combat ESG scores.” We should applaud and support all elected officials who are willing to stand against ESGs. However, not all are aware of this issue, so please consider contacting your state lawmaker and ask them to support H. 4978. Let them know you want no part of any anti-American social credit scoring system.
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The list of what could go wrong with a system like this is obviously very long. Here are a few from the economic side. Clearly, it will be fraught with corruption. Who gets to decide the parameters of the scoring? Who assigns the scores to the companies and individuals? Smaller companies and start-ups will be at a tremendous disadvantage as they will not have the resources needed to navigate the complex web of regulations needed to get a high ESG score.
ESG compliance will cause the costs of consumer products to go up and it will obviously interfere with supply and demand as companies focus more on obtaining a high score and less on what consumers want and need. As time passes, the entire ESG-reporting cottage industry grows bigger, making it much more challenging to pull back ESG scoring influences going forward.
The Alliance has met with South Carolina businesses (probably completely unaware of the ramifications of ESGs) who are working to secure ESG compliance officers. Awareness and education regarding the serious downsides of ESGs and how they can expand in scope is key. As concerning as this is for free market capitalism, it is even more alarming what ESGs could do to us individually, to our civil liberties, the social bonds that bind us and to our nation as a whole. The best place to push back on this is at the state level of government. Please share this information on the dangers of ESGs with family, friends, and business owners and please support our state house representatives who are pushing back and taking a stand; there is a lot on the line.
We hope business owners and non-business owners alike will consider joining the Mom and Pop Alliance as we work to provide a stronger voice for all South Carolina small business owners and raise statewide awareness on the disturbing practice of ESG social credit scoring.
ABOUT THE AUTHOR …
Diane Hardy is a former nurse anesthetist turned entrepreneur, who opened a franchise at Verdae in Greenville over five years ago. She is executive director of the Mom and Pop Alliance of SC, which she founded during Covid upon discovering South Carolina’s almost 400,000 small businesses had little representation in our State House. The Alliance provides education, communication, and advocacy for SC’s family-owned businesses. Her passion for South Carolina’s small business is strong, and as such she donates her time to the organization, accepting no salary or government funding. Her love for our state isn’t new. Before launching the Mom and Pop Alliance she was the founder and host of The Palmetto Panel (2014-2019), an annual statewide conference highlighting issues impacting South Carolina. Diane has a bachelor’s degree in nursing and psychology from Michigan State as well as a master’s degree from MUSC. She and her husband have three adult children and are enjoying life as empty nesters.
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