ESG is Corporate Socialism (ESG: Myths and Realities)
Coherent Identifier About this item: 20.500.12592/sgfwh8

ESG is Corporate Socialism (ESG: Myths and Realities)

12 January 2023

Summary

According to Milton Friedman, in a capitalist society the sole role of business is to make money. “[T]here is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” ESG, the “Environmental, Social, and Governance” model of business administration, operates on the opposite premise: that the responsibility of business is to achieve social good. Also known as “stakeholder capitalism” and “corporate social responsibility”, under ESG, companies must endorse and pursue progressive social and political objectives. In the words of Michael McCain, president and chief executive of Maple Leaf Foods, the role of business is “to channel resources to tackle the monumental social and environmental issues of our time, including our climate crisis and food insecurity. Leading this effort cannot be confined to government, NGOs or social activists. It can only succeed with the direct engagement of forward-thinking business leaders.” ESG’s vision of social good is not a neutral, benign vision of a better world but an ideological agenda with an emphasis on climate activism, critical race theory, and central planning. Inside the corporate structure, ESG undermines the duty of officers and directors to act in the best interests of the corporation, thereby empowering management at the expense of shareholders, creating an executive aristocracy. From the outside, ESG assesses corporate value by measuring commitment to political goals rather than profitability, thereby threatening companies who dissent from its mandates.

Creators/Authors

Bruce Pardy
Professor of Law, Queen’s University