Heartland Institute research explores how ESG is being implemented, and why it must be stopped
ARLINGTON HEIGHTS, IL (April 28, 2023) — A new report by The Heartland Institute offers a thorough examination of the growing threat that ESG standards of “stakeholder capitalism” pose to the U.S. economy, the free market, and individual liberty.
Authored by Heartland Institute Research Fellow Jack McPherrin, the report explains how ESG (environment, social, and governance) has “become one of the gravest threats facing the free societies of the world today.” This paper has been developed to provide a comprehensive overview of ESG, and to give elected officials and policy makers specific solutions to oppose this movement that is driven by a destructive ideology.
At its core, ESG is a social credit scoring system that ideologically aligned elites and subservient bureaucratic authorities have developed to “reset” the global financial system to their advantage, fundamentally transforming society in the process. This is accomplished by altering traditional frameworks of evaluating businesses and assessing investment risk.
Rather than determining the creditworthiness and value of a business or industry based upon objective measures such as profit, return on investment, consumer demand, and other material performance measures, ESG’s architects seek to judge entities based upon subjective and difficult to quantify social and environmental goals. These objectives typically have little or nothing to do with business success in the marketplace based on consumer demand expressed through their purchases.
After comprehensively analyzing all of ESG’s nefarious impacts, this report ultimately offers ways that states can fight ESG (page 41), how Congress can take action (page 42), and how ESG can be opposed using the leverage of U.S. foreign policy (page 42).
The following statements about the Heartland Institute report may be used for attribution. To speak to any Heartland Institute expert, please contact Director of Communications Jim Lakely at [email protected] and 312/377-4000 or (cell) 312/731-9364.
“The coercive imposition of environmental, social, and governance (ESG) systems across the global macroeconomy is one of the gravest threats to freedom and economic prosperity facing us today. Any entity—whether that be a large corporation, small company, sovereign country, or individual—that does not comply with ESG’s subjective and political mandates faces serious consequences. The elite oligarchs and institutions behind ESG designed it to be an infinitely malleable system of societal control, in which they inorganically alter the free marketplace by artificially modifying supply and demand.
“Entities that do not comply risk losing basic access to financial services, such as investment infusion, lending, insurance underwriting, and other benefits that should be accessible to any member of society objectively considered to be worthy of credit. Moreover, many Americans are at risk of seeing their hard-earned money invested in retirement accounts and other investment vehicles drastically diminish, as fund fiduciaries are now being induced to use those funds on behalf of non-material goals.
“This paper provides a sweeping overview of ESG, including its history, specific metrics, the actors responsible for ESG, the problems associated with ESG, and an analysis of how ESG will only become more powerful in the coming years if it is not stopped. To that end, this paper also provides specific policy recommendations that will halt ESG in its tracks, if state and federal policymakers have the will to protect their constituents and the country.”
“ESG is an insidious threat to individual freedom and economic progress, as this important paper explains. ESG efforts threaten everyone’s retirement, their ability to obtain and maintain credit, and even to have bank accounts and do business with banks. A cabal of political and financial elites are using social credit scoring in the form of ESG to enforce docile acceptance of the progressive social and economic goals they favor.
“Because knowledge is power, this paper is an antidote to the ESG push, providing a comprehensive analysis of ESG, including: what it means; who developed it; why some are advocating for it; the dangers it poses to individuals, individual companies, entire industries, and the economy as a whole; and how to fight it at the state, federal, and international level.”
“Environmental, social, and governance (ESG) scores are a direct threat to the free market and individual liberty. Instead of allowing supply and demand to dictate the products and services companies offer to their customers, the proponents of ESG seek to use arbitrary metrics, which they can modify at any time, to control these businesses by limiting their access to capital and other financial vehicles if they do not play ball.
“Unlike shareholder capitalism, which is built upon the foundation that businesses should maximize profits by offering the highest quality goods and services at the most affordable price, ESG is predicated on stakeholder capitalism, wherein businesses’ primary objective is to serve the esoteric interests of multiple parties. While this may sound good on its face, it is potentially quite dangerous because it places politics and other subjective criteria over the company’s bottom line.
“Because ESG remains a relatively new concept, many people are unaware of the whole story behind the ESG movement. This new Heartland Institute report uncovers the history of ESG, explores how it is being implemented, explains why it must be stopped, and most importantly, offers simple steps that lawmakers can take at the state and federal level to prevent the spread of this economic and social poison.”