Skeptics, including former faculty and alumni of the school, many of whom spoke on condition of anonymity for fear of recriminations, fear the MBA program could serve as progressivism in business sheepskin clothing. One recent graduate warned against a one-sided presentation of left-wing politics used “to justify increasing the power of the state in markets and firms while demonizing capitalism.”
“By creating a major [in ESG] at Wharton you are helping to legitimize it,” said another graduate.
When RCI asked Henisz to clarify his remarks, he said: “I believe that the science on climate risk as investment risk is settled. I do not see substantive academically grounded debate on this point.”
“There are, by contrast,” he added, “legitimate questions as to how, when and where climate risk poses investment risk and we encourage all such discourse, research and debate.”
One recent graduate, Isaiah Berg, told RCI that Henisz’s comments were “sad to see,” noting that there are “good faith disagreements that exist around ESG topics.” If Henisz’s “intent was not to persuade, but instead to intimidate those who might otherwise speak up and disagree, he likely achieved his goal.”
Others expressed similar concerns. Alex Edmans, a former Wharton professor who earned tenure at the school in part based on his writings on ESG, is a qualified supporter of the school’s push into the space.
Nevertheless, Edmans told RCI, he supports Wharton’s introduction of the ESGB major—with two conditions. “First, the courses should be taught by professors with substantial expertise,” he said. “Other schools have launched such courses because they are popular, and faculty have suddenly reinvented themselves as ESG experts; as a result, such courses are based on wishful thinking, not scientific evidence.
“Second, the courses should cover research and evidence on both sides of the issue, rather than only what people would like to hear.”
Although those speaking out lamented that there was a distinct chill over expressing dissenting views, Edmans and recent graduates noted that in their personal experience, Wharton professors strained not to bias their presentations in classes.
As one recent alumnus recalled, when the subject of shareholder (traditional) capitalism versus “stakeholder” (ESG) capitalism arose in a business ethics class, “Our professor asserted that there is no data to indicate that either guiding philosophy necessarily resulted in a better-run company. He gave examples of how either philosophy could lead to higher shareholder returns, and counter-examples of how each philosophy, when taken to its logical extreme, could lead a company astray.”
The alumnus also emphasized that in classes where “green” matters came up, the analytic methods students learned would have generally led them to see policies such as the Democratic Party’s Green New Deal as “a blend of wishful thinking and pure nonsense.”
“We did study climate change and its implications,” the alum added, “but there was no detectable ideological indoctrination.”
Some required classes will include—on the “environmental” side of ESG—“Climate and Financial Markets” and “The Business & Governance of Water.” In the “social” and “governance” realms, courses include “Social Impact and Responsibility” and “Reforming Mass Incarceration and the Role of Business.”
‘Indoctrination’ in the Application Process
One recent Wharton graduate told RCI that “indoctrination” in ESG/DEI-related subjects is baked into business schools before students ever enter them. “It starts right in the applications,” he says, which, in his experience applying to top business schools, is embodied in essay prompts like “How are you going to change the world?” He believes such leading questions naturally lend themselves to emphasizing ESG. “Never do they ask, how are you going to preserve the status quo? Or, how are you going to protect the American system, capitalist system?”Wharton, at least when he applied, avoided asking such questions. This graduate added that when major investment banks came to campus to recruit students, “the whole Wall Street recruiting process was chock full of DEI stuff,” as well as “blatant discrimination in my opinion.” Recruiting emails obtained by RCI show financial services firms offering prospective Wharton applicants individual break-out sessions broken by affinity groups including women, blacks, Hispanics, Native Americans, LGBTQ candidates, and other “underrepresented” peoples. Many banks also advertised diversity fellowships for graduate students.
“Other than Asian and white men, everyone else had extra sessions made available to them with the banks,” said the alumnus. He claims one could draw a line from this incremental facetime, and inherent identity politics, to “who got the internships.”
Some off-campus ESG critics believe the introduction of such majors could diminish the school’s academic seriousness, if not the long-term job prospects of students.
Vivek Ramaswamy, author of “Woke, Inc.” and co-founder of Strive Asset Management, which has created several “depoliticized” investment vehicles, told RCI that “The inclusion of the ESG/DEI major goes hand-in-glove with affirmative action: the latter lowers the overall quality of students that Wharton admits, which necessitates intellectually lightweight ‘majors’ like ESG and DEI.”
Another critic, Andy Puzder, former CEO of CKE Enterprises and onetime Trump administration nominee to head the Department of Labor, told RCI: “I don’t think there is anything wrong with majoring in ESG or DEI, but I suspect it will be much like majoring in gender studies. Over time, job opportunities outside of teaching will be limited absent activist governments and asset managers.”
Stephen Soukup, author of “The Dictatorship of Woke Capital” says that “B-schools have now positioned themselves in opposition to the actual marketplace of ideas,” citing the work of like-minded scholars such as RealClearFoundation’s Rupert Darwall, the Competitive Enterprise Institute’s Richard Morrison, and Ramaswamy, as having “pretty thoroughly discredited the intellectual underpinnings of the ESG/stakeholder movements.”
But by the same token, he warns, “We’ve lost the institutional fight. The pro-ESG forces control the federal bureaucracy, the universities and B-Schools, and other institutions. ... They can keep this clearly destructive, clearly disproven scheme going indefinitely, which will result in serious damage to capital markets and the economy more broadly.”
