by DIANE HARDY || Why should you care about ESGs? The short answer is because ESGs will impact anyone who consumes food or energy, and their impact on YOU will continue to grow at lightening-speed if this issue is not addressed. Many have never heard of the term ESG – which gives points for compliance on the following causes: Environment (climate change mitigation), Social justice, and Governance. It’s like a credit score but focuses the company’s efforts on progressive social issues.
I first wrote about ESGs six months ago. ESGs are extremely complex (and brilliant if you are into authoritarianism and centralized decision-making). Currently, ESG scores for most major companies can be found online.
At first glance ESGs may seem like an esoteric corporate issue that has little to do with the average South Carolinian. But make no mistake: ESGs are currently being used to circumvent the democratic process, increase inflation, and will stifle competition from small business and start-ups through increased compliance costs. Clearly, this hurts all small businesses and individuals, which is why the Mom and Pop Alliance was the first organization to alert the South Carolina state legislature about this alarming issue. We should all care about the health of small business since they are the backbone of most communities.
ESGs have already had a disastrous impact in a relatively short amount of time on countries further down the ESG road. Sri Lanka, Ghana, the Netherlands, and several other European countries are experiencing the fall-out from their adoption of ESG’s policies. For example, their implementation of “green energy” as well as the restriction of non-organic fertilizers has produced sky rocketing prices leading to food and fuel shortages. No wonder Elon Musk called ESGs “the Devil Incarnate.”
Marketed as doing right by the environment and society, the pressure placed on corporations to have a good ESG score is intense! Government, asset managers, and others use a variety of “carrots and sticks” to coerce compliance from private business. Have a low score? Your company’s access to government contracts, permitting, financing, and investments could all be put at risk. Furthermore, if a company isn’t ESG-compliant they may face increased regulations, potential SEC intervention, and a decreased credit rating. This pressure to comply is driving an explosive expansion of DEI (Diversity, Equity and Inclusion), and an inordinate emphasis on sustainability and other woke values in the corporate world.
With its origins in the UN, the IMF, and the World Economic Forum, could ESGs really impact small business owners and individuals in South Carolina? Yes, absolutely! And here’s the brilliance I referred to earlier: large corporations will be graded on their vendors upstream and downstream, meaning who they buy from and who they sell to. For example: if an insurance company takes on customers with a low score, then the insurance company’s rating goes down. What a genius way to alter people’s behavior and institute policies which would never make it through the voting booth.
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Citizens of red states will be forced into compliance without a single vote of their legislatures. A recent example is the plan for VISA, Mastercard, and American Express to institute a separate international standardization code for gun and ammo sales, when previously they were labeled as general merchandise.
Two other important points: There is big money to be made in the new ESG compliance industry. It will be increasingly difficult to stop the growth of the ESG social credit scoring system if the compliance industry becomes entrenched. Finally, and most astonishingly, the grading metrics used to calculate a company’s ESG score are arbitrary and can be changed on a whim, although there are entities working to standardize the compliance metrics. Imagine the power of the elites who get to decide what the global standardized ESG metrics will be!
Fortunately, people are starting to become educated on this issue. In fact, as people are starting to catch on there has even been mention of changing the name from ESG to something else. Because ESGs have far-reaching effects the solutions will need to be multi-faceted and will include litigation and legislation, as well as creating non-ESG free market alternatives. These efforts will take time and those who support ESGs have a 20 year head start along with hopes of using funding from the “Inflation Reduction Act” to help incentivize companies to get on board with the agenda.
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Thankfully, we are beginning to see innovative ways that states are beginning to push back legally, legislatively, and in developing some free market alternatives. Nationwide there are several examples but here are just a few:
- WV, OK and TX work to address the “E” of ESG in a variety of ways. For example, WV’s
Treasurer will not give their state’s business to banks who boycott fossil fuel producers. Only one
bank out of six (US Bancorp) opted to stop boycotting fossil fuel producers. - AL – Troy State University created a Free Enterprise Scholars Program, teaching free market
principles and combatting woke ideology. - FL – Gov. DeSantis passed a resolution stating that Florida’s pension investments will be based
on risk/return only, not ideological interests. - MO, KY & WV, plus Attorneys General from fifteen other states (including South Carolina) – Investigate Morningstar and their Sustainalytics platform for their ESG metric with an alleged Anti-Israel bias.
Here in South Carolina, during the last legislative session the Mom and Pop Alliance introduced SC’s very first bill to address ESGs via Rep. Anne Thayer (H4978). Its purpose is to protect citizens from discrimination by requiring financial services to be based on financial metrics only, i.e. no social credit scores. It quickly obtained 32 co-sponsors. Later in the session S.C. Senators Kimbrell and Bennett introduced (S1226). If passed, it would require South Carolina banks, credit unions and insurers to disclose if they use ESG scores or “diversity, equity and inclusion practices” when doing business in our state. The hope is (with strong citizen support), to get these and other ESG bills over the finish line this upcoming legislative session, which begins in Jan. Additionally, the Alliance has been in contact with our State Treasurer and Attorney General and they are both informed on the issue and are already exploring ways to protect South Carolinians.
The Mom and Pop Alliance will continue to educate citizens and legislators about the realities of ESGs as well as promote legislative solutions to help address its adverse effects. Please consider joining us in this fight. It is vital that South Carolinians become informed and help to educate their elected officials about the grave risks from ESGs. Time is especially short on this issue as they are swiftly implementing this new form of corporate capture absolutism. With your help, South Carolina has a real opportunity to become a leader in the nation by pushing back on this damaging “wokeism” by protecting free market principles and provide a blueprint for other states to follow.
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ABOUT THE AUTHOR…
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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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SOUND OFF…
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