The phoney ethics of ESG

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Top Highlights

• what is ESG? What does it mean for us? And, guided as it is by the very visible hand of the Davos elite, where is it taking us?

• The Environment, Social and Governance movement grew out of a late 20th-century approach that used capital as a means of fighting for social and moral causes.

• the watershed moment for ESG came in 2004, when a UN initiative called the Global Compact released a report called “Who Cares Wins”. Issued by some of the world’s biggest (and most financially aggressive) banks

• groundwork for how the financial world can “integrate environmental, social and governance issues in analysis, asset management and securities brokerage”.

• ESG is more a pledge of corporate legitimacy than it is a framework of ethical guideposts, with some of the world’s most corrupting, polluting, and abusive firms taking up the green standard of the movement

• Like many global ideologies, ESG bears a kernel of truth.

• For those who don’t get to spend $250,000 on a five-day-long conference, ESG can seem like a network of interlocking policies that are never put to a democratic vote.

• the gaze of enforcement turned from government to corporate actors

• While there is a heavy critique of market capitalism associated with ESG, there is also a faint echo of its core tenet: that capital should reign supreme. The difference is that while for neoliberalism, capital was the ends to achieve at the cost of (almost) any means, for ESG, capital is the means that’s justified by a moralistic end.

• In the ESG setting, governance is about how companies are run. The notion here is simple: Enron — an American energy company that practiced only a thinly-veiled cronyism as it committed fraud and ultimately failed — is the definition of bad; BlackRock — driving profit as it pledges to invest only in causes accredited by ESG — is good.

• Such a Manichaean division, however, obscures the fact that, however exquisite the window dressing, corporations cannot play the role of ethicist, priest or prophet, and the more they try the more we risk corrupting those essential roles.

• “Global governance is a means to manage issues that cut across national borders — whether it is a war, a pandemic, a financial crisis, climate change, or a geo-economic dispute.”

• ESG has rapidly filled the void left by the death of globalisation. If the latter was an imperative to spread capitalism laterally around the world, ESG can be seen as an effort to vertically consolidate the power accumulated by globalism

• to weigh in on our most pressing ethical, moral, and epistemological concerns

• ESG is a tool of the elite. It’s nominally aimed at constraining the excesses of globalised capitalism, but in effect it’s just as much a means of entrenching those excesses, codifying them in a moralistic power structure. After all, who gets to decide what makes for good environment, social and governance practices?

• ESG is not a passing trend but very much the moral engine driving the rise of a new approach to power and economics. What it means for the rest of us, however, is decidedly less certain.