by DIANE HARDY
Why does corporate “woke-ism” continue to grow despite consumer pushback, and what is its endgame? From the outside, watching companies focus on political agendas rather than products and customer satisfaction seems antithetical to all we know about business – but when you understand the evil genius of ESGs coupled with non-profit activism, it all makes sense.
ESGs are a very powerful tool for social change, so it is important to understand what they are and how they work – as well as the risk they pose to small business. I’ll be honest, it took a good bit of study for me to fully grasp the big picture of ESGs and woke-ism – and attempting to make sense from the nonsense was a challenge. However, a few years ago when the pieces finally came together for me, as the executive director of the Mom and Pop Alliance of SC I felt called to travel the state to educate legislators, citizens, and small business owners – warning them about this very complex issue and helping protect the Palmetto State, to whatever extent possible, from this absurd and dangerous form of social credit scoring.
Before we get into ESGs I think it’s important to understand the bigger picture of what we are living through right now. I believe we are experiencing a clash between two world views: those who support DECENTRALIZED decision-making versus those who believe CENTRALIZED decision-making is best. Decentralized decision-makers believe in individualism, free markets, equality, self-government, Federalism, etc. Most small business owners fall into this category. Centralized decision-makers lean toward utopian ideals, they believe people are ignorant and need experts to guide them, they believe in institutions, and in social equity. In short, they follow a Plato-like philosophy – THE (smart and selfless) FEW SHOULD RULE THE MANY.
With this in mind, let’s now take a closer look at ESGs.
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ESG scores (Environmental, Social Justice, and Governance) are an extremely complex form of social credit scoring – measuring a variety of ever-changing woke priorities – currently placed on big business (but designed to trickle down to small businesses). Businesses are compared and rewarded – or punished – based on their ESG scores, so it is in their interest to do what they can to raise their scores. With a foundation coming from global entities such as the UN and World Economic Forum (among others), ESGs have advanced virtually undetected for almost 20 years. The success of the spread of this global social credit scoring cannot be denied. According to KPMG (one of the world’s largest accounting firms) thousands of companies in more than 50 countries have ESG systems in place, including 82 percent of large US companies. Today, most large companies post their ESG scores online.
In addition to ESGs, a lesser-known social credit score has been introduced by the advocacy group Human Rights Campaign, called CEI (Corporate Equality Index) which is specific to LGBTQ+ issues. They have experienced tremendous success using social media and mob-pressure to ensure compliance. They constantly move the goal posts, so companies continue to jump through ever more outrageous hoops to stay in the good graces of the activists and obtain good CEI scores.
“KING OF THE WORLD”
The pressure on companies to comply with ESGs has been intensified through a very disturbing public-private partnership between government and private industry. Using a variety of carrots and sticks, our federal government is helping advance the agendas proposed by ESGs. For example, a low ESG score can put a corporation at risk of losing permits, government contracts, etc. But it’s not just governmental pressure; big banks and investment firms such as BlackRock, State Street and many others also put the squeeze on by harnessing the power of proxy votes and threatening to pull their investments. Non-compliance can result in a loss of banking services or being dropped from investment firms, causing a company’s stock to crater. Add to this the many well-funded non-profits including As You Sow which also use proxy voting to take over corporate boardrooms and you can see the power imposed. Clearly, companies are in a tough spot.
In addition to avoiding the negative effects of this dystopian public-private partnership there are additional reasons why businesses may decide to “go woke.”
- Some are true believers, as woke-ism can take on a religious quality. It appears to some that Target may fall into this group.
- Some companies want to virtue signal, and in so doing, cloak themselves in self-righteousness.
- Some view it all as simply more new regulations, unaware of ESGs’ negative effects.
- Finally, many are afraid of the mob. It appears this could be what motivated Bud Light’s hiring practices and support of LGBTQ+.
Unbelievably, ESG compliance criteria are inconsistent and ever-changing, so what gives a company a good score one day may not be enough the next day. Of course, there are efforts to standardize ESG scoring, but so far, a consensus hasn’t been reached. Imagine the power in getting to determine what ESG criteria will be for the entire globe. Talk about being “king of the world!”
Through ESG and CEI scoring, social and political agendas can now be implemented quite efficiently. Things that would never be popular in the voting booth are now easily achievable. For example, they can mandate an ever-changing green agenda, or determine that it hurts a company’s score to offer any financial services to gun stores or Christian-owned companies. The possibilities are endless! The (evil) genius of ESGs is that they upend free markets AND accomplish an end-run around representative government, the Constitution, and the Bill of Rights. Additionally, the Diversity, Equity and Inclusion (DEI) training promoted by ESGs replaces meritocracy by focusing on things like race and gender rather than character and ability.
It’s also important to understand what equity means. Equity is VERY different from equality. Equality is something to strive for: equal opportunities for all. By contrast, equity is about EQUAL OUTCOMES, so someone gets to decide what needs to be done to make things fair or equitable. Inevitably, that means discriminating against one person or class to give to another to make things even or “equitable.”
With ESGs, a new cottage industry has emerged. There is a significant amount of money to be made in ESG compliance. The world’s largest accounting firms are of course supportive of ESGs, given all the new business it will bring them in “helping” businesses to stay compliant. Add to this the money being raked in through Diversity, Equity, and Inclusion (DEI) training classes and the “needed” continuing education classes to keep corporate attorneys and HR professionals up to date on all things ESG, and you can see how many would not want this gravy train to pump the brakes in any way.
You may wonder, “How could this be? How is it that I haven’t heard more about this?” The reason is because if you shine a light on it, you put yourself at risk, as the writer of the Dilbert cartoon soon learned after being cancelled in 77 newspapers for posting a cartoon poking fun at ESGs. ESG fallout is not just theoretical; there are many, many real-life stories of companies and individuals negatively impacted by ESG mandates. Entire countries have suffered from their harmful effects as the citizens of the Netherlands and Sri Lanka can attest. Their leaders signed on with the World Economic Forum’s vision of reducing climate change by banning nitrogen fertilizer and requiring organic farming. The result was skyrocketing prices, and severe food and fuel shortages.
WOKE GOES LOCAL
We see how incredibly widespread the impact has been, but how can mandates from the UN and World Economic Forum possibly impact us on a local level, even down to small family business in South Carolina?
In the United States, in addition to business, we see the impact of DEI on education and local governments. For example, the City of Greenville, S.C. has posted a job opening for a DEI officer with a salary range of $86,000 – $121,000, while a posting for a new police officer’s beginning salary is around $47,000. In addition to the DEI officer for the city, both the city government and the city police each have an LGBTQ+ liaison.
There are other concerning changes such as the Greenville City’s police department’s Strategic Plan which was recently updated to reflect that Strategic Goal #1 is “Supporting Diversity, Equity, and Inclusion Initiatives.” Astoundingly, “Reducing Serious Crime” was moved to Strategic Goal #2. One can’t help but wonder how many other South Carolina cities are doing the same thing.
ESG mandates require large corporations to obtain ESG criteria from all their vendors upstream and downstream, i.e., from whom they buy and to whom they sell. To better understand this, let’s take a hypothetical example. Let’s say you own a family-run landscaping company in Myrtle Beach, and you maintain the grounds of a large international hotel chain. It would be in the best interest of that hotel chain to have high ESG and CEI scores so that they don’t risk losing contracts for conventions from the government and large corporations. To maintain these large convention contracts the hotel would be required to collect ESG information on each of their vendors, including the locally owned landscaper. A small business owner who decides not to comply with the ESG reporting criteria would be at risk of losing that account, and thereby be very motivated to comply.
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South Carolina small businesses are already starting to be impacted. Actual examples of survey questions sent to small businesses have included:
- Does your company have an environmental footprint determined?
- Does your company have specific targets related to environmental sustainability?
You can quickly see how new political agendas can be pushed through a society very efficiently and how ESG compliance could overburden small business owners.
This form of economic extortion also causes increased costs for everything, because ESG compliance is an added expense placed on goods at every step of the supply chain as well as required services such as insurance, banking, technology, etc. Every business is paying out money to stay in compliance and those costs get passed on to all of us.
It’s important to note centralized decision-makers also have hopes of ESGs going beyond businesses to the individual level. For example, to keep their scores up, companies would want to attract individual customers who also have high ESG scores, so obtaining insurance or a mortgage might be more difficult for those whose energy use is deemed too high, or who donate to the “wrong” non-profits, or aren’t living a green lifestyle, or a host of other metrics that can be changed on a whim.
By far, the most concerning aspect of social credit scoring is potentially linking these scores to a Central Bank Digital Currency (CBDC). A Central Bank Digital Currency is a government-based form of currency (not linked to a physical commodity) that allows the government to track all spending. Coupled with an ESG score this would give unprecedented POWER TO THE FEW who WISH TO RULE THE MANY.
WHAT CAN WE DO?
By now, you’re probably thinking, “This is overwhelming! What can we possibly do about it?” A few years ago, when I first started connecting the dots on ESGs/Woke-ism and their impact on business I really didn’t think things would come to light in time to make a difference. At that time, it seemed almost impossible given how complex, powerful, and concealed it all was, but that is changing!
So, the answer to the question above, is: A LOT! Thankfully, there is still much we can do on many fronts! Importantly, because much of this is coming through private industry, crafting effective legislation is challenging but it’s not impossible. Our nation is the best equipped country in the world to fight ESGs because our unique form of government gives us additional protections, such as states’ rights, free speech, anti-trust and civil rights laws, and more. All of these make it much harder for what happened to the truckers in Canada to happen here. The solutions to ESGs are multi-faceted and include a 3-pronged approach:
- Litigation – lawsuits from state AGs, employees, shareholders, etc.,
- Free markets – building a parallel economy, and individuals voting with their wallets, and
- Legislation coming from the states.
Of course, federal legislation would be the best way to protect Americans from the devastating effects of ESGs, but Biden vetoed the one bipartisan bill that passed this year to help protect Americans’ retirement accounts, so this must happen at the state level.
This is why the Mom and Pop Alliance of SC has been working diligently to raise awareness and develop legislation on this issue. Several other states have tackled various aspects of ESGs, but by far the most comprehensive comes from Florida. South Carolina’s state treasurer, Curtis Loftis, and our attorney general, Alan Wilson, have been very strong on pushing back on ESGs – but I would like to see our governor and the S.C. General Assembly do more. Last session the S.C. House passed a very limited ESG bill (H.3690). On the Senate side, senator Sean Bennett and others have been doing some good work on ESGs with S.583, but it still needs to be brought across the finish line.
It would be great to see our governor join the governors of nineteen other states who have signed on to a multi-state alliance pushing back on ESG (click here for more info). The Mom and Pop Alliance will continue to work to protect our Palmetto State from the devastating effects of the ESGs/ woke-ism.
These past three years have been especially tough on family-owned businesses. Our state’s small business owners need our full support during these very challenging times. Please consider supporting the Mom and Pop Alliance of SC in our efforts to protect small businesses and promote economic freedom in our great state!
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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.