The Left takes notice of the ESG oligarchy

Like metal filings between magnets, issues today line up with the “blue/progressive” pole or the “red/conservative” pole. But
ideological
simplification can disguise underlying currents where the lines of force touch and many on the Left and Right agree.

Take the case of
ESG
, or environmental, social, and governance standards devised by non-governmental organizations and imposed by asset managers in proxy challenges and orders on how to vote on
corporate
boards.

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Alarm about ESG is seen by the media as a hobbyhorse of the Right. A recent letter by 21 Republican attorneys general to asset managers portrays unaccountable power — a cartel of left-wing NGOs, blue state pension funds, several asset managers, and two firms that control almost the entire proxy advisory market — holding corporations hostage.

They have a point. The top three asset managers alone cast about one-quarter of votes at S&P companies’ shareholder meetings. And the causes pushed by this ESG cartel range from defunding existing fossil fuel projects and mandating support for abortion rights, to the discouragement of donations to free market trade groups and Republican political candidates. Regardless of your politics, this is economic power being used to curtail the First Amendment.

So it comes as little surprise when conservatives such as Sen. Ted Cruz (R-TX) say that BlackRock CEO Larry Fink and his peers should be barred from voting on behalf of other investors “to advance their own political interests.” The Texas senator added, “That is not capitalism, that is abusing the market.”

Although the media won’t admit it, this market abuse is now causing pain. ESG’s emphasis on investments in Big Tech companies and de-emphasis on oil and gas companies means that millions of small investors are seeing red down arrows in their pension statements. But restricting energy investments conversely means that Wall Street firms and the billionaires who control them are making huge profits on their remaining conventional energy investments.

Awareness is growing that corporate oligarchies are driving unequal wealth. In a recent CNN interview with Sen. Bernie Sanders (I-VT), the Vermont socialist and author of It’s Okay to Be Angry about Capitalism, warned about a consortium of asset managers. “I’m talking about power,” Sanders said. “If you have three Wall Street firms that combined are major stockholders in over 90% of the major corporations in America, determine who is on the board of directors, I think that is real power.”

Robert Kennedy Jr., now running against President Joe Biden for the Democratic nomination for president, made the explicit connection of the power of these Wall Street firms with ESG mandates.

“Climate issues and pollution issues are being exploited by, you know, the World Economic Forum and Bill Gates and all of these big mega-billionaires,” Kennedy said in an interview with talk show host Kim Iversen. “They’ve given climate chaos a bad name because people now see that it’s just another crisis that’s being used to strip-mine the wealth of the poor and to enrich billionaires … the most important solution for environmental issues, not top-down controls is free market capitalism.”

“What we have in this country now is not free market capitalism, it’s corporate crony capitalism,” Kennedy said, calling corporate climate campaigns a “cushy kind of socialism for the rich and a brutal, barbaric, merciless capitalism for the poor.”

While many Democrats will dismiss Sanders and Kennedy as outliers, their iconoclastic positioning should tell us that these politicians see an opening among many Democratic constituencies. Kennedy, after all, is polling at an astonishing 14% among 2020 Biden voters. Many progressives can see, as conservatives do, that ESG’s exercise of unaccountable power across the entire economy is inherently undemocratic.

Progressives can also see that the ESG cartel is cartoonishly elite. And they are perpetrating a gross violation of antitrust law, a set of regulations revered as sacred by many on the Left. The ESG cartel violates antitrust law by communicating ideological and commercial directives in “flagging” bulletins directing exactly how boards should vote. These actions are clear and openly stated violations of the Sherman Antitrust Act, which outlaws coordinated conspiracy in the “restraint of trade.” No less a progressive luminary than Lina Khan, chairwoman of the Federal Trade Commission, wrote: “The antitrust laws don’t permit us to turn a blind eye to an illegal deal just because the parties commit to some unrelated social benefit.”

Are we seeing the emergence of a Left-Right coalition to curb the ESG cartel? If so, it will not be for the sake of a single issue or party, but to protect the forgotten man and woman, the consumer who buys and the worker who saves.

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Robert H. Bork Jr. is president of the Antitrust Education Project.