ESG (environmental, social, and governance) is an ideology enforced within a society by governments through the corporate world, changing how the people live, according to Kevin Stocklin, writer and producer of the documentary “The Shadow State.”
ESG also can be understood as an industry, Mr. Stocklin said in an interview to EpochTV’s “American Thought Leaders.” As an ideology, it is an umbrella of progressive issues, such as climate change, reducing carbon emissions, social justice, social equity, worldwide economic equity, and similar things.
As an industry, it has tens of trillions of dollars behind it, which are used to persuade corporate America to get along with its program. Another way to understand ESG, Mr. Stocklin said, is to think of it as a way “to impose a progressive agenda on the private sector and the United States.”
The ESG movement can affect how America deals with energy, or with so-called social justice, by taking the voice away from the general public and giving the power to make decisions to a very small number of asset managers or CEOs, meaning that these policies are not the public will, or what the majority of people believes.
The shareholders in today’s companies—who can influence voting in them—are large investment funds, such as BlackRock and Vanguard Group, that directly buy shares, and they have voting rights in the companies’ boards for making business decisions. Individuals who buy shares are not called shareholders now but end investors, Mr. Stocklin said, as most of the average people buy some pieces from these large funds and do not buy stocks directly.
BlackRock has $8–10 trillion under its management, according to Mr. Stocklin, approaching the U.S. economy’s level of assets. The three largest fund managers are BlackRock, Vanguard, and State Street Corp., which manage a combined $20 trillion, something close to the total GDP of the United States.
Mr. Stocklin said that these three companies have majority shares in 75 percent of all U.S.-listed companies. “It just gives you a sense of the power that a very small number of people, of these asset managers have over the private industry.”
For example, this asset management group has the majority of Apple shares, and Alphabet shares, and this is just in the technology sector.
Another aspect on how BlackRock, Vanguard, and State Street can coerce companies they invest in to adopt ESG is that these big investment funds manage retirement funds as well.
Three-quarters of all shares in U.S. publicly traded companies are held by these institutional fund managers in the form of index funds, mutual funds, and pension funds, and not by individual investors.
According to Mr. Stocklin’s previous research, BlackRock itself says that they contact corporate leaders in the firms they invest in, but also they do something described by BlackRock as “thought leadership.” Even though the term is unclear, it seems to not have any connection to business activity, and it might be pressure to adopt ESG policies, according to Mr. Stocklin’s interview.
The three big investment funds might also be changing ESG’s name bacause of the pushback, and calling it sometimes as sustainabilty, or stakeholder capitalism.
Mr. Stocklin said that the meddling in Exxon—under pressure from this cartel of asset managers—was done through a very small activist shareholder called Engine One.
Engine One’s plan was to put environmental activists on Exxon’s board, so they leveraged their relationship with BlackRock, State Street, and Vanguard to create a coalition of shareholders that successfully forced Exxon to put three activists on their board, against Exxon managers’ will.
“Their goal was to revert Exxon away from producing oil and gas, into producing renewable energy.”
That a huge company like Exxon could be pressured to do things against its will shows the “genius” of ESG, said Mr. Stocklin.
“The genius of the ESG movement is that they were able to find the pressure points, who can we go to, to essentially get leverage over these companies.”
So the ESG movement found that it can put pressure on big companies not through people who own stock in them, or consumers, but through these big asset-management firms who now act as intermediaries.
Another example discussed was the World Wildlife Fund (WWF), which clearly said in one of its presentations in 2011 that they cannot focus on close to 7 billion consumers, or the 1.4 billion producers for a specific matter, and that the “pinch point” was the few investors who owned shares in close to 80 percent of companies.
That’s one of the most antidemocratic movements in history, according to Mr. Stocklin, as the ESG movement does not bother to come into contact with consumers but only with some investment firms that can control what is happening in society’s companies.
There was a huge shift in Nestlé’s stance, for example, similar to other big food companies like Danone and General Mills, which are supplied by millions of small farmers. Because these companies constitute a small number of buyers, they can have farmers dancing to their tune, and they have said to the farmers, “as a result of the ESG movement, this is what we want you to do, what we want you to produce, these are the processes that we want you to follow if you are to sell to us,” Mr. Stocklin said.
So what the WWF presentation meant, according to Mr. Stocklin, is that the WWF should not bother with the billions of consumers but rather it can go to Nestlé instead which can throw out of business any farmer who does not comply to WWF’s wants. Unless this farmer does not build a local clientele, it is most probable that he will be out of business if he does not sell to Nestle, Mr. Stocklin said.
The ESG movement puts a priority on interfering with beef production and synthetic fertilizers, Mr. Stocklin said, so they can go to Nestlé and get such companies “to lean on the farmers, in addition to everything that’s coming down as laws.”
The ESG movement originated in 2005 in the United Nations. The UN has its sustainable goals, such as environmental, social, and economic, that are communicated to governments around the world. ESG was started as a way to exert such influence on the private sector, according to Mr. Stocklin.
In the United States, where a large portion of companies were outside of government control, ESG’s goal was to get the private sector on board with this ideology, while getting the government in lockstep with this ideology at the same time, Mr. Stocklin said.
Why are big companies risking alienating their customers with wild ideas, such as Anheuser-Busch with transgenderism? The answer, according to Mr. Stocklin, is the pressure from their shareholders.
It is not that these company managers became irrational; they are rather rational in following their shareholders demands. Individuals are not the shareholders any longer, they are end investors, the asset management companies are the shareholders, and the companies respond to their direct shareholders.
There is more complexity to it, as there is also a duopoly of proxy advisory companies that support the ESG movement, and these companies advise the fund managers on voting. In other words, there is a centralization effort, an effort to cut back freedom and free speech, similar to how a communist system operates.
