Have We Reached Peak ESG?

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Commentary

“Go woke, go broke.”

This catchphrase has become more than a clever play on words. Like all clichés that make their way into common social expression, it’s a cliché because it’s generally true, at least in its sentiment.

It was just a few years ago that the corporate giants of America took it upon themselves to champion the woke environmental, social, and governance (ESG) “standards” of politically correct attitudes and behaviors and apply them to their business models.

What could possibly go wrong?

Well, as we’re now seeing, quite a lot can and will.

Companies Take on the Woke Yoke

Many companies that took the ESG woke ideology to heart, that is, to their business, have seen less than ideal outcomes. Ask the good folks at Bud Light about losing money with their foray into the “social” aspect of the ESG movement.

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The Disney brand is another “woke” company that has lost billions in a series of box office flops from films that push the ESG woke ideology, especially LBGT social messaging, not to mention the billions lost in market value as share prices have fallen.

Going Woke Isn’t Fatal to Big Business, but It Hurts

The reality is that in most cases, boycotts of woke businesses won’t destroy global companies such as Anheuser-Busch or Disney, at least not in the short term. International conglomerates have multiple revenue sources, which often include long-term government contracts and other long-term business relationships that will keep them in business and likely profitable for the foreseeable future. In other cases, there simply isn’t an alternative.

But there are other consequences to orienting a business model to the ESG agenda, particularly with the environment part of ESG. Seeking to force companies to continually reduce emissions even if they’re meeting current regulatory standards is a part of the ESG agenda and can also cut into profitability.

The Woke Pushback Is Here

But CEOs who remember what their job is are pushing back.

No one knows this better than Exxon CEO Darren Woods. Under Mr. Woods, Exxon is suing investors who are trying to force the company to further reduce carbon emissions, presumably under the mythical belief that carbon dioxide, which makes up 0.04 percent of the atmosphere, is bad for the planet. Mr. Woods is also pushing back against the idea of achieving net-zero carbon emissions by 2050 as not possible.

In fact, many companies, large and small, are now touting themselves as “woke-free” or having “traditional values” as a way of appealing to customers who don’t want to be told what to think by corporate America. Firms such as Exxon, Wendy’s, and Tesla are now well-known as non-woke companies.

Elon Musk’s X Factor

Without question, one of the biggest factors countering the woke trend was and remains Elon Musk’s acquisition of X, formerly known as Twitter. This is simply because the ESG and woke agendas, which also include forced diversity, equity, and inclusion hiring practices, rely on the censorship of free speech as a means of enforcing societal compliance and adoption of those radical leftist agendas.

The free and open discussions that X has enabled have had a huge impact on Americans’ ability to speak their minds without being canceled (another ESG/woke tactic and value) and have helped people learn more about who they’re doing business with and what companies really stand for and what they don’t.

The ESG movement has nothing to do with business. Business is all about meeting the needs of society as expressed in the marketplace with the best products and services each business or organization can muster. That’s called competition. Competition breeds excellence, which results in sales. People will generally buy the best that they can afford, which compels most firms to streamline operating costs while providing the best they can to their target market.

In short, people want to not just boycott brands that hate them but also put their money where their heart is. Most don’t want to be dictated to and told that their traditional values are not important, or worse, immoral. To at least some extent, those companies that wish to do so will find their market share shrinking, if not their market value.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.