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Is ESG Illegal?: Kevin Stocklin on the New 'High Priests of Society' Transforming Corporate America

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[FULL TRANSCRIPT BELOW] “The genius of the ESG movement—and we have to recognize how clever this movement actually is—is they are able to find the pressure points. And so they’re able to find who can we go to to essentially get leverage over these companies.”
In this episode, I sit down with Kevin Stocklin, writer and producer of "The Shadow State," an EpochTV documentary that investigates the industry of environmental, social, and corporate governance, also known as ESG.
“If you're a farmer, you pretty much have to dance to their tune. And they have gone out and they've said to their farmers as a result of the ESG movement, ‘This is what we want you to do. This is how we want you to produce. These are the processes that we want you to follow if you're going to sell to us,’” says Mr. Stocklin. “It's the banking industry, it's the asset management industry, and it's the insurance industry. And if you can get these folks on board, you can control everything else.”
How does the ESG mechanism work? Who are the players involved? And is there a way to push back?
“We're starting to see the power that private industry has to control us in a way that, in the West at least, the governments legally can't do,” says Mr. Stocklin.
He explains how ESG is both an industry and an ideology. Put simply, it is a way to use consumer money to impose a progressive agenda on the private sector in America.
“Even though it's our money that's funding the whole thing, they basically are the ones that have the votes, and they're able to put pressure on companies to essentially do what they want them to do,” says Mr. Stocklin.


Jan Jekielek: Kevin Stocklin, it’s such a pleasure to have you on American Thought Leaders.
Kevin Stocklin: Thank you for having me on.
Mr. Jekielek: You've had The Shadow State documentary out for quite some time. You've also been writing on all issues related to ESG for The Epoch Times, and I've learned a lot from your writing. ESG is still kind of amorphous in a lot of people's minds. As with a lot of things in our current cultural moment, it hides behind high-sounding words. Please explain what this is.
Mr. Stocklin: We have to understand ESG both as an ideology and as an industry. As an ideology, it’s an umbrella of progressive issues. It's everything from climate change and reducing carbon emissions to social justice, racial equity, and economic equity worldwide. That's the ideology of it, but it's also an industry.
It has tens of trillions of dollars behind it, and these trillions are used to really arm-twist corporate America into getting behind the program. The simplest way that people can understand ESG is that it's a way to use other people's money, effectively our money, to impose a progressive agenda on the private sector and on the United States.
Mr. Jekielek: It's hard to imagine how corporate America has come on board with all of these ideological agendas. Please trace how that happened, because it certainly wasn't like that 20 years ago.
Mr. Stocklin: The big picture of this is really a shift in how Americans save their money, if I could just take a step back and put it that way. There was a time when if you wanted to save for your retirement or your kids' college or to buy a house, you might buy shares in AT&T or GE. But over the past several decades, we've seen the rise of the fund industry, whether that's mutual funds, ETFs [Exchange-Traded Funds], index funds, or pension funds.
This means that there is now an entire industry between us and the company. Before we would have been shareholders in AT&T, but now we are no longer shareholders. We are now what is called the end investor. We don't own shares in AT&T, we own shares in these funds. The fund managers, BlackRock, Vanguard, or State Street, are the ones who buy shares in these companies. They're the shareholders and they have all of the votes when it comes to voting those shares.
In addition to the whole industry that's sprung up between us and the companies, we also have rating agencies and all sorts of nonprofit pressure companies. They are able to act on these companies, even though it's our money that's funding the whole thing. They basically are the ones that have the votes and they're able to put pressure on companies to essentially do what they want them to do.
Mr. Jekielek: It's the rise of these middlemen. In the case of BlackRock, does it have the level of assets of the entire U.S. economy under its management? It's some astronomical number that is almost unfathomable.
Mr. Stocklin: It is close to that. Depending on how the market is doing on any given day, BlackRock has between 8 and 10 trillion dollars under management. The three largest index fund managers are BlackRock, Vanguard and State Street. Between the three of them, they have close to $20 trillion of assets under management. That's about equal to the U.S. GDP. Just to give you some stats on this, 75 percent of all the shares in U.S. companies are currently owned by these institutional asset managers vs. private people going out and buying shares directly.
Those top three asset managers, Vanguard, BlackRock, and State Street, are the largest shareholders for about 90 percent of the companies in the S&P 500 today. One or some combination of those companies are the largest shareholders in those companies, whether it's Apple or Alphabet. It gives you a sense of the power that a very small number of these asset managers have over private industry.
Mr. Jekielek: There's an example of that power where the Exxon board was reorganized by these asset managers. Do you remember that?
Mr. Stocklin: Yes. It was a very small activist investment firm and shareholder called Engine No.1, and their plan was to put environmental activists on the board of Exxon. As we know, it's an energy company, and they produce oil and gas. They were able to leverage their relationships with BlackRock, State Street, Vanguard, and also with some of the activist state pension funds, CalPERS and CalSTRS out in California, and put together a coalition of shareholders that essentially forced Exxon, against the wishes of management, to put these three activists on their board. Their goal was to divert Exxon away from producing oil and gas towards producing so-called renewable energy.
Mr. Jekielek: I never imagined that a company with the size and stature of Exxon could be coerced into doing anything.
Mr. Stocklin: That is the genius of the ESG movement, and we have to recognize how clever this movement actually is. They're able to find the pressure points where they can go to essentially get leverage over these companies. They found that they can't talk to the however many millions or billions of shareholders or consumers out there. But they can find this shortlist of asset managers and pension fund managers who actually pull the strings when it comes to shareholder votes. They were able to do this with a company as large as Exxon, one of the largest companies in the world.
Mr. Jekielek: You were showing me how the World Wildlife Fund thinks about this in their own words. Let's roll that clip.
Audio: We actually need collusion around sustainability at every level with every type of institution. Where do we start? Who do we work with? How do we work on these issues? This is new ground for us. We decided we needed to map it out. There's 6.8 billion consumers, give or take, maybe closer to 7 billion today. Do we work with all those? Do we work with the 1.4 billion producers of all these different products?
Do we change the way they produce things or do we focus on the narrower neck, the pinch point in each of these commodities where 300 to 500 companies control 70 to 80 percent of each of those 15 commodities that we care about? We decided that this is the strategy that we could actually get our arms around.
Mr. Jekielek: They're talking about the actual pinch points, and have figured out if you can get the right leverage in the right places in the system, you can exert an incredible amount of control, but not even be that significant in the system.
Mr. Stocklin: This is another case of someone in a moment of hubris saying the quiet part out loud. First of all, he talks about collusion between companies, which is illegal, but he's not worried about that. He's also not concerned about the billions of consumers out there and doesn't bother with them. Neither does he want to bother with all of the farmers out there who are actually producing beef, in this case.
They're trying to control the beef industry. They say, “We're not concerned about them either. We're going to go to the very large food manufacturers and food processors. There's just a few of them that control the buying and the selling of agricultural products. We're going to go to them and we're going to get them on our side.”
It speaks to the underlying beliefs of this ESG movement that we as consumers, farmers, and small family-owned companies shouldn't have a voice in any of this. We should not have a say in any of this. We should do what we're told by these key industry insiders. Fundamentally, this is one of the most anti-democratic movements that has ever arisen.
Mr. Jekielek: I rewatched The Shadow State recently, and I was reminded that Nestle has become the largest food company in the world. I knew about them from years ago because they were very interested in cornering water sources, which a lot of people were very concerned about. I was at a primatological society conference a long time ago. One of my advisors was the guy that was running UNICEF at the time. He wanted to get me to put some disparaging remarks about Nestle's behavior into my speech.
At the time I was thinking, "Should I really do this? Do I really want to have Nestle on my case?" Of course, there was definitely some questionable behavior there. Fast-forward to today, and we have these Agenda 2030 sustainable development goals, and a company like Nestle is completely on board. It signals a really huge shift over a relatively short period of time.
Mr. Stocklin: The food companies, Nestle, Danone and General Mills are supplied by hundreds of thousands of small farmers, but they are what's called a monopsony. They are a very small list of buyers, so if you're a farmer, you pretty much have to dance to their tune. The ESG movement has said to their farmers, "This is what we want you to do. This is how we want you to produce. These are the processes that we want you to follow if you're going to sell to us."
If a farmer doesn't want to sell to Nestle, they're out of business unless they can build up a local clientele to buy their products, so farmers are really held hostage to this. But again, it speaks to the graph that the gentleman in that video clip put up. He asks, “Why should we bother with all the hundreds of thousands of small farmers when we can just go to Nestle? If we can get Nestle on board with the agenda, the farmers will follow suit because they have to.”
One of the things that this movement really hates is animal agriculture, particularly beef. They feel that it’s too polluting, and they also don't want things like synthetic fertilizers. They're able to go to Nestle and companies like this and get them to lean on the farmers, in addition to everything that's coming down through laws.
Mr. Jekielek: You make the case in the film that these sustainable development goals are driving a lot of this. This is an international institution and these are international goals. Are things somehow coordinated around these sustainable development goals at the UN?
Mr. Stocklin: ESG originated back in 2005 at the UN. The UN has their sustainable development goals, environmental and social and economic, but ESG developed as a way to get the private sector on board. It's one thing for governments to make laws, but in a country like the United States, so much of our society is outside of government control. It's privately-owned companies and private decisions made by individuals. The whole ESG movement was set up to address the question, “How do we get the private sector on board with this ideology, while at the same time getting government in lockstep with the ideology?”
Those are the roots of the ESG movement. Then the World Economic Forum set up a strategic partnership with the UN and said, "We're going to push this as well." You have WEF members such as BlackRock that are happy to then filter it down.
But again, the genius of the movement is the search for these pinch points in the world of finance. It's the banking industry, it's the asset management industry, and it's the insurance industry. If you can get these folks on board, you can control everything else.
Mr. Jekielek: Kevin, how did you come to be thinking about all these things? You were in finance, and quite liking it. How did this all come about?
Mr. Stocklin: I'll try to give you the short version. My career in finance actually started in Prague, and I was working with Citibank there. That was such an education because they were rebuilding an open society, a democratic system, and a free market system.
Mr. Jekielek: This is right after 1989.
Mr. Stocklin: Yes, exactly, in the early 1990s. They were recovering from decades of socialism and communism. They had to set up a currency, a legal system, and property rights. They needed to get people to have faith in the system, start their own companies, and confidently feel that they could speak freely. I was watching them try to rebuild this system from scratch.
After that, I moved back to New York and worked on Wall Street. Today what I am witnessing is that we are working in reverse in many ways in this country. We are recentralizing authority, and we are losing free speech and property rights. That led me to start investigating and writing and speaking out on these issues.
But with ESG specifically, in company after company, whether it's Coca-Cola, Disney, Target or Anheuser-Busch, they're starting to behave in very strange ways. They are doing things that are alienating huge portions of their customer base, and they're wading into these very controversial political issues. For example, Coca-Cola decided to fight the state of Georgia over voter ID laws, when the overwhelming majority of every racial category supported them.
The question in my mind was, "Why are these companies behaving in such a strange way? It's so punitive for shareholders. It's hurting their sales, and it's destroying brands." That was the question that brought me to the ESG industry. I asked, “Why would companies behave in such an irrational way?” Then you realize that they actually are behaving very rationally, and they are doing what their shareholders want them to do.
Even though it's our money, we're just the end investors, and we're not the shareholders anymore. All of those trillions of dollars are going through these small asset managers. They are the shareholders, and these companies are responding to what the shareholders want them to do.
Mr. Jekielek: Just to clarify, the small asset managers, is that BlackRock? You said that it's going through these small asset managers.
Mr. Stocklin: The large asset managers are the big players. We always single out BlackRock just because they are the largest and have been one of the most vocal, but they're not the only one by far. Quite a few other asset managers are on board with this, along with state pension funds. BlackRock has really just become the lightning rod, but they're not behaving that much differently from many other asset managers today.
Mr. Jekielek: I do have this clip with Larry Fink of BlackRock talking about the mentality or the approach that's used in this context. Let’s roll that clip.
Audio: Behaviors are going to have to change, and this is one thing we're asking companies. You have to force behaviors, and at BlackRock we are forcing behaviors. 54 percent of the incoming class are women. We added four more points in terms of diverse employment this year. What we are doing internally is that if you don't achieve these levels of impact, your compensation could be impacted.
You have to force behaviors, and if you don't force behaviors, whether it's gender or race, you're going to be impacted. That's not just with recruiting, it is also development, as Ken said. Ultimately, it's still going to take time. But I am just as much shocked as Ken is that we have not seen more opportunities, and that we're going to have to force change.
Mr. Jekielek: First of all, he's talking about how we have to be into everything, even stuff we don't like, which is interesting. Then he's talking about the thing that we can use is our vote, and then he's talking about forcing behaviors. Wow.
Mr. Stocklin: What made these firms as rich as they are and as big as they are was the rise of the index funds. An index fund basically buys every company in an index. If it's the S&P 500, you go out and you buy those 500 companies. The point that Larry Fink is making is that if I don't like what Exxon is doing, I can't really divest out of Exxon. They're in the S&P 500 index, so I have to own them. The only power that he really has as an asset manager is the shareholder vote.
Again, this is a case of saying the quiet part out loud. A proxy vote is BlackRock, Vanguard and State Street and pension funds voting on our behalf, voting on the behalf of the end investors. That's where the power is, and that's explicitly what he said in this interview, "That is the power that I have, and I'm going to use it to the nth degree."
In addition to the asset managers, there are the proxy advisors, and this is a duopoly. There are two companies, ISS and Glass Lewis, and together they have about 98 percent of the proxy advisory vote. What do they do? All of the state pension funds that cannot necessarily research the tens of thousands of shareholder votes that may come up across their whole portfolios, they go to these advisory companies and say, "How should we vote on this issue?" Then the advisory companies advise them.
It turns out both of these proxy advisory companies are supporting all of these sustainability goals. They have said, "They don't necessarily have to follow our advice," but it turns out more than 90 percent of the time, all of these state pension funds and all these other asset managers do follow their advice. It speaks to the power of the proxy vote and how you are able to control corporations through this system.
Mr. Jekielek: Please explain to me how these asset managers have gotten behind this ideology. You mentioned the World Economic Forum, which is a favorite punching bag these days. It's like people ascribe all sorts of things to them. Who are they, and what role do they actually play in influencing this behavior?
Mr. Stocklin: It's very interesting to try to assess the motives in all this and what drives them, and there certainly is a profit motive. It's very good to be in business with the government. When it came to handing out a lot of the Covid relief funds, BlackRock was chosen as the gatekeeper of who's going to get money. There's a revolving door between the Biden administration and BlackRock officials, who are very much moving back and forth. The ties are very close.
To what extent are these people true believers, and do they actually believe that these are worthy goals? I think a lot of them do. A lot of them may feel that because of climate change or because of racial inequities that they are doing God's work or acting morally and that they are kind of the high priests of society in some ways. I think there may be some true believers as well.
The companies that go along and play ball, they tend to do very well. The government shines on them, the government doesn't regulate them, the government doesn't question their monopolistic positions, and the government might give them a lot of subsidies. It's a combination of goodwill and profit-seeking.
Mr. Jekielek: But the reverse is also true. The ones that don't play ball may suddenly invite some regulatory oversight.
Mr. Stocklin: We've seen cases of that too, and Elon Musk is a high profile example. He acquires Twitter and it becomes a free speech platform, and then suddenly he's subject to a government investigation. Isn't that interesting? With his ESG rating for Tesla, which makes EVs, you would think this would be at the top of the ESG scores.
Tesla is well below companies like GM, which predominantly makes internal combustion engine cars, but GM is willing to play ball. GM is willing to build EV factories. GM is willing to say, "We're going to convert our fleet to electric cars within the next decade." Then you have Elon Musk who exclusively makes electric cars, but he's doing all this nasty stuff with Twitter. He’s letting people say what they want to say, so he's being punished for that.
Mr. Jekielek: It was kind of nuts for Bud Light to do that particular marketing campaign with Mulvaney. It just made no sense at any level, except for to keep your ESG score up.
Mr. Stocklin: Yes, and there are outside pressure groups as well. The Human Rights Campaign has been very active in rating companies. They have their corporate equality index and you want to score high on that. If you're a CEO, that's essentially going to make your life a whole lot easier. Disney is an interesting case study. Disney has been destroying their brands for years now, whether it's Star Wars, Indiana Jones, or Snow White. They pursue the progressive stories that they feel that it's important for them to tell.
But the cost of this to Disney is losing subscribers and losing visitors to their park. Their sales are down, and their share price is down. None of this is good for the end investors, but it may be fine for the shareholders. BlackRock doesn't care either way about the share price, they're going to get their fees either way.
An issue came up with Florida parents' rights laws. Basically, the law said, "Don't teach or raise or discuss sexual topics to kids in school between kindergarten and third grade." Most people would think this is not too crazy, and most parents seem to support that. Bob Chapek, the CEO of Disney, Initially said, "We're going to stay out of this. We're a media company. This is not our thing." As time went on, he got a lot of pressure from some internal employees, but we weren't privy to those conversations.
Presumably, he got some pressure from some outside groups as well. He was forced to change his ways and jump in and fight Florida over this. This has turned out to be a huge mess. He lost his job a few months after that. The returning CEO, Bob Iger, then said, "We wish we were never dragged into that controversy," as if anybody ever dragged them into it.
This is a case study of how a CEO is trying to run a company profitably, and then is being dragged into, and effectively arm-twisted into jumping into these highly controversial political issues that end up costing them sales, costing them profits, and hurting their share price.
Mr. Jekielek: These companies themselves will have activists. They know they have the weight of the system behind them, so they can be very vocal and they'll get supported. Then you have these activist organizations that have indices, like Human Rights Campaign that are on the same team.
You have a company like Vanguard or BlackRock also exercising their vote to push the same agenda. Then you have the government, or at least the administrative state saying, "Yes, this is exactly what you need to do, and don't worry, we won't regulate you." All of this is essentially working in the same direction. The only thing that's working in the opposite direction is the consumer.
Mr. Stocklin: Yes, there has been a philosophical shift behind all this. If you're managing a company, the philosophy is what's called shareholder capitalism. You manage a company for the owners. You manage a company to maximize profits and maximize the share price for the benefit of the owners. There were some problems with this, some externalities with pollution and things like this, but the idea was that it imposed discipline on a company. It was a very quantitative clear assessment of what your job was and whether or not you were performing your job.
But then there was a shift to what is now called stakeholder capitalism, and everybody got on board with this. This was officially approved by Jamie Dimon, the CEO of JP Morgan Chase, who was the head of the Business Roundtable at that time. He announced, "We're now shifting to stakeholder capitalism. Instead of managing the company for the benefit of the shareholders, we're now going to manage it for the benefit of the stakeholders." Who are the stakeholders? It's everybody. It's the employees, it's your neighbors, it's the environment, and it's whatever activists may be out there.
Mr. Jekielek: In many cases, as we've learned on this show throughout the years, communist China is also a stakeholder.
Mr. Stocklin: In some cases, yes, they can be. However, there are two elements of society that have absolutely no say anymore. They are the consumers who buy these products, and they are the end investors, the people who put up the money. Those two have been completely boxed out of this whole process.
Mr. Jekielek: Which is counterintuitive.
Mr. Stocklin: Yes. One thing that is so important to understand about U.S. society, it's not just about political freedom, it's about economic freedom as well. That's what we're losing here as consumers and as savers. That we've lost our vote in terms of what we want to buy, what we want to have supplied to us, what kind of food we want to eat, and what kind of cars we want to drive. We've lost our vote as investors as well, because now we're end investors, and we're not shareholders anymore.
Mr. Jekielek: You said that BlackRock collects their fee anyway, and they don't actually care about the value of the company. How can that be? Please explain that.
Mr. Stocklin: If I'm an asset manager, and I'm paid a fee on investments in my fund. I would like that fund to go up because if it goes up 10 percent, my fee is 10 percent higher. If it goes down 10 percent, my fee is 10 percent lower, but I'm still getting a fee either way.
On the other hand, if I am an end investor and Anheuser-Busch's share price tanks by 20 percent, that's a direct loss for me, and I've lost that much money. People often think of shareholders as wealthy Wall Street fat cats, and why should we care about them?
Now, we are the shareholders. We are the retirees. Whether we're saving for pensions or our children’s college or to buy a house, this is our savings. What it means is when a company's share price is less valuable, we have less money for retirement, to pay for education, to buy a house, or do anything else that we want to do with our savings. The pain when a share price tanks like that is felt by us much more than an asset manager that may have 500 companies across the S&P 500 in their portfolio.
Mr. Jekielek: This is a good explanation why BlackRock might be pushing all sorts of money into an incredibly exposed place, and creating a lot of unnecessary exposure for its shareholders, because they get paid anyway. If they get paid a lot by communist China, which they do in huge amounts, that changes the equation somewhat.
Mr. Stocklin: It does. The interesting thing about ESG funds is they actually tend to get higher fees, and the reason is that an index fund is what is called a passive fund. They just go and they buy the index, and you can automate that to some extent. But if you are looking at an ESG fund, you have an asset manager that's actively going and choosing companies. They're assessing how compliant they are with ESG. Those tend to be higher fee funds, and asset managers tend to get paid a higher fee if it's an ESG fund vs. just a straight index fund.
There's certainly a motivation, and the trend has been towards the index funds, because they are lower fee funds. As it turns out, they perform just as well as the managed funds. ESG was a way to revive the asset management industry. Now, we have a new opportunity to earn those fat fees that we were losing by everybody shifting to index funds. That was also part of the motivation.
Then there's a whole industry that is now earning their income from this. There are all the ESG rating agencies that now exist and attached to them are these ESG consultancies. You can hire ESG consultants to advise you on how to get your ESG scores up. There are the ESG accountants. We are going to be seeing green accounting according to the new SEC regulations, so there's a whole new industry. A lot of people's livelihoods are now dependent on keeping this ESG business going.
Mr. Jekielek: We've seen these backlashes with Target and Bud Light have to do with people becoming aware of this outrageous behavior.
Mr. Stocklin: There are isolated cases of that. Bud Light is probably the most high profile example right now, and also Target and Disney to some extent. The issue is that those are consumer-facing companies. Disney is a family entertainment company, and Bud Light also has their clientele.
In these cases, they were really hurting themselves by taking on these political campaigns. On the other hand, you have a company like Nike that probably actually did well from their support of Colin Kaepernick and all of the positions that they've taken. It really does vary.
Here's a case in point on consumer choice. Ford makes all their money from these big trucks and SUVs. They are being pressured now to shift their fleet to EVs. How are they being pressured? One, there are new EPA emissions regulations that are coming out that basically the only way that they can comply is if two-thirds of their fleet within the next 10 years will be EVs. Two, there are tens of billions of dollars in subsidies coming out for them to build EV plants and then to transition to EVs. Ford will lose $4.5 billion on their EV fleet in 2023. This is a huge money loser for them.
Consumers don't seem to want these things, but here's a company that is being pushed to do this transition. Where's the consumer's voice in this? If I want to buy an internal combustion engine car, the strategy is that they just won't be available within the next decade, or they will go up in price because they're subsidizing all the losses that they're incurring on their EV fleets. In this way, consumers are losing their choice. It's not that there's a ban on internal combustion engines, it's just that nobody's really making them. They're doing the same thing with gas stoves. There are all sorts of new regulations on refrigerators and dishwashers and washing machines. Consumers are starting to see that all these products they like and value are suddenly disappearing because manufacturers can't make them anymore.
Mr. Jekielek: On a number of American Thought Leaders episodes, we've talked about luxury beliefs. You can enjoy having these beliefs without a lot of personal cost. In fact, there is a personal benefit for participating in all the ways that we've just been describing. You don't want to get on the wrong side of the Human Rights Campaign, or any of these other rating agencies, because they could create a huge potential backlash. They can motivate a large number of activists to make your life absolutely miserable.
Mr. Stocklin: The Achilles heel of this whole movement is to simply shed light on it. It's to simply look at the economics and ask the question, “How is this actually supposed to work?” For example, we can look at EVs. We know the consumer demand doesn't seem to be there. These things are backing up on dealer lots. They're not selling anywhere near the numbers that the Biden administration wants them to.
The auto companies are not going to be able to source these raw materials to even build these things in those kinds of numbers. Why? Because you have to mine cobalt and lithium and all these other rare earths to make these batteries, and it all goes through China. The majority of these things are all refined in China. At this point, the mining industry is saying, "We just can't do enough strip mining to get you enough lithium and cobalt and all of these other minerals that you need to build these things."
The third thing is the electric grid. I have spoken to some folks at the FERC [Federal Energy Regulatory Commission] and the NERC [North American Electric Reliability Corporation]. The NERC basically is in charge of monitoring the reliability of the North American electric grid. They said there's not a single region in North America that has the capacity to charge these EVs in these kinds of numbers.
We start by asking the question, "Economically, how is this actually supposed to work, this transition to EVs?" The whole narrative starts to fall apart. Then you can go even farther and ask, "How is this helping the environment, because you're strip mining, you're poisoning rivers, and you're polluting the air to extract all these minerals?" It's very often done with slave or child labor in places like the Democratic Republic of Congo.
To make one EV battery, you have to move about 250 tons of earth to get all the minerals that you need. Out of that, you get about 50 usable tons that you will ship to China, processing it there with energy from coal-fired plants that create more CO2 emissions. Then you ship it back to the U.S. where it's going to be assembled.
By the time you've done all this, you have produced so much CO2 that you will have to drive that car for about six to eight years before you break even with an internal combustion engine car. Therefore, we're not actually helping the environment. This is a long answer, but we need to start just looking and asking questions about how this ideology is good for anybody. It will then start to fall apart pretty quickly
Mr. Jekielek: According to the ideology, the way people who are pushing this stuff justify it to themselves by saying, “We're doing something right. This is just the collateral damage of our moving towards our utopian society.” They think it is the proposed outcome of the fourth industrial revolution, as it's been described. Again, the idea is that to make an omelet, you have to break a few eggs.
Mr. Stocklin: ESG is fundamentally a central planning ideology. It's the idea that smart people and experts should be coming up with the plan. For the rest of us, it's our job to follow. Whether it’s with the cities, the automotive industry, or fossil fuels, it's a central planning ideology.
Central planners brought us concepts like collective farming, which produced famine and led to tens of millions of deaths in Russia. After they had done that, 20 years later, they did it again in China, even after having seen how damaging it was. The collateral damage is often immense.
We're already seeing the collateral damage in the United States with the increase of prices, inflation, and the unaffordability of food and gas. It flows to the entire economy. The war on fossil fuels is not just affecting the price at the gas pump. Farmers use diesel and fertilizers derived from natural gas. These prices go up and then food becomes unaffordable. This is the result that we're seeing for all of their good intentions, if they're even good intentions at all.
Mr. Jekielek: The unspoken thing is that our energy use needs to go down. A number of people have argued that it's a naturist philosophy, and that humanity is actually the blight on the earth, and we need to kind of prevent that blight.
Mr. Stocklin: Currently, we've got close to 8 billion people on the earth and nearly half of them are fed by synthetic fertilizers derived from natural gas. If you take those fertilizers out of the equation, we just can't feed the people that are on this earth today.
Mr. Jekielek: Sri Lanka tried it, as you point out in the documentary.
Mr. Stocklin: Famine ensued. They followed the UN directives. They did what the ESG industry wanted them to do. They banned the import of synthetic fertilizers. Within a year, their crop yields collapsed, and they were facing famine and starvation. The government actually was overturned and booted out of the country as a result of that.
We're much more efficient here in the West, so we're not really seeing the effects to that extent, but we are seeing prices go up. We are seeing farmers in places like the Netherlands and even Canada being pressured to go out of business, especially if they're beef farmers.
Mr. Jekielek: In The Shadow State documentary, Alex Newman, a regular contributor to The Epoch Times, makes the case that centralized planners create a crisis so they can be the solution for that crisis. He uses Venezuela as an example. He says, "Look at what happened there. That's the outcome of ESG programs." Is that really a reasonable assertion?
Mr. Stocklin: It is. The government is a very poor manager when it comes to private assets and investment. But when the government gets involved in the economy, the result is inevitably you divert resources from what consumers want. The result of that is shortage. As a result, prices tend to go up. This is what we're seeing in the U.S. with fuel and with food. The next step is that the government will say, "Who did this to us? It's these greedy capitalists. They're making too much profit, and we need price controls."
Now, the government has stepped in and they're going to control the pricing mechanism. We know when we set price controls, the result of that is more shortage because people are not going to produce things if they can't make a profit. Then it tends to get into an even deeper crisis. Every solution is always that the government needs to step in and solve this, whether it's subsidies, price controls, and more taxes so that we can pay people so they can afford to buy food and gas. It is very much a vicious cycle. The solution to the problem is always more government intervention.
We're hearing this even now from people like Bernie Sanders and Kamala Harris and Elizabeth Warren. They say, “It's these greedy oil companies. They're making too much profit, and we need to get them. We need to set price controls on them and stop them from making profits. “ They are completely ignoring the fact that they have been working on them for the past few decades, getting them to produce less oil. That's the whole point of the ESG movement.
Mr. Jekielek: Does that end up in a society that is on the so-called Maduro diet?
Mr. Stocklin: Yes. Hopefully we never get that far here, but in the case of Venezuela, that was it. That was a very, very wealthy country. It was one of the richest countries in South America at one point. They have huge oil wealth and a very prosperous middle class. Now, there's people that are starving and they're trying to get across the border to get food and medical supplies.
We've seen that on a bigger scale in countries like China and Russia, the famine that results from central planning, and all of the societal dysfunction. With a large country, tens of millions of people can die as a result of this. History tells us how this game ends. It's a shame that we have to relive it again and again, but that seems to be the case.
Mr. Jekielek: Looking at this globally coordinated pandemic response that we had, particularly the lockdown policies that nearly destroyed all the economies that participated, it fits into this whole ESG construct perfectly. What's your reaction to that?
Mr. Stocklin: It speaks to the darker side of ESG, and that is the collaboration and the partnership between large corporations and government. Covid was a fascinating case study. These lockdown policies that came out of government, who did they apply to? They didn't shut down Amazon, they didn't shut down Walmart, and they didn't shut down Target. No, they closed all of the little mom and pop shops, restaurants and bars, and family-owned businesses, and they went out of business.
There was a shift of wealth from small-time business owners and family owners to these big corporations like Apple, Amazon, and Walmart, who made profits off of Covid. All of these big companies did very well. They had record profits from that whole Covid lockdown policy.
With all of these small business owners, it’s very difficult to control them. There's just too many of them, and they don't necessarily buy into the ideology. But you can work with Amazon and Apple to get them on board. It shows that companies that play ball can have a lot of profitability. There's a lot of upside to being one of the insiders in this whole game.
The more pernicious element is the fact that this partnership has allowed or created a situation where corporations have really kind of become executioners for the government. One of the biggest problems and impediments for the ESG movement is the United States. It's our Constitution, our Bill of Rights, and all these limits that we've placed on government. It says the government can't censor, can't take your property away, and can't surveil you. Now, corporations can do all this, and they have been doing it on the government's behalf. This is really the dark side of the ESG movement. We're seeing the tech industry censoring Americans during Covid. Any commentary questioning the source of the virus or the vaccines was censored. It was not censored by the government. It was censored by YouTube and Facebook and Twitter.
In terms of surveillance, we have the Fourth Amendment that says the government can't do unreasonable search and seizure. They need a warrant. They need some proof of a crime before they go and search people's houses or their private information. But the banks have all this information and they routinely hand it over to the government.
Around January 6th, Bank of America is now accused of data mining all of their customer accounts, with no evidence of a crime from any specific customer. The bank searched for who was in Washington at this time and who might have bought a firearm around this time. They handed over a shortlist of customers to the FBI and the DOJ of customers who might have behaved this way. We saw a case with the credit card companies that they now want to start tracking firearms purchases. But all of this is legal behavior. You can go out and you can buy a firearm. We have the Second Amendment.
Mr. Jekielek: What about the banks closing trucker and trucker-affiliated accounts during the Freedom Convoy in Canada?
Mr. Stocklin: In a way, that was the most blatant example of the power of the finance industry over people. The truckers in Canada were protesting the Covid vaccine mandates. How did the government get them to stop? It went to the banks and said, "Freeze their accounts. Cut off their access to their own money. Cut off their credit cards, so they can't buy food and fuel." Suddenly overnight, they are instantly impoverished. They have no money, they have nothing. The government can't do that, but the banks can, and they did. We're starting to see the power that private industry has to control us in a way that, in the West at least, the governments legally can't do.
Mr. Jekielek: I've had on the show a number of people involved in using the power of the purse of the state government to limit some of these policies. They say, "If you're doing this ESG stuff, you're not working for us." How has that evolved?
Mr. Stocklin: Yes, this is where the pushback is coming from. It's all coming from the state level, and it's coming in a couple of forms. A lot of state asset managers, state treasurers, and state financial officers are saying, "If you're pushing these policies, we don't want to do business with you in our state. You're not going to manage money for us, and you're not going to get any banking contracts.”
For some states, it's a matter of life and death. If you are in West Virginia and your banks are saying, "We're not going to lend any money to the coal industry," or asset managers saying, "We're going to cut off the coal industry," that's going to cost you jobs and people's livelihoods. Texas is another example. These states are pushing back at that level.
The other way that they're pushing back is state attorney generals are actually starting to say, "We need to enforce U.S. laws." There are two ways in which this whole movement is highly illegal. One is antitrust laws. According to the Sherman Anti-Trust Law and other antitrust laws in the United States, it is illegal for companies to collude with each other to take down another company or another industry. What could be a more obvious example of collusion than joining the Net-Zero Banking Alliance, the Net-Zero Asset Managers Alliance, or the Net-Zero Insurance Alliance? These are all UN climate clubs where they pledge that they are going to reduce the use of fossil fuels across their entire portfolios. We're seeing state AGs starting to do discovery for some antitrust actions against some of these companies. The second way that they've been violating the law is on civil rights, not only our federal civil rights laws, but a lot of state civil rights laws that prohibit discrimination on the basis of race or gender or nationality.
If you have corporate quotas that say X percent of our new employees are going to be from a certain racial or gender group, all of that is illegal. The Supreme Court just re-emphasized that point with Harvard University. We're going to start seeing some actions there as well.
Just recently 23 State Attorney Generals as well as the House Oversight Committee sent letters off to the UN Net-Zero Insurance Alliance saying, "What are you guys up to? We'd like to understand how this organization works." Immediately, about half the insurance companies who were members quit the club. I find it very interesting that a simple letter that asks about what they are actually doing causes half the membership to just say, "Hey, we're out."
Mr. Jekielek: They say sunlight is the best disinfectant, and it's so incredibly important. But a lot of this is often hidden behind all sorts of opaque structures, and it's very difficult to penetrate them.
Mr. Stocklin: Yes, the world of finance is very opaque. For people who are investing their money, it's difficult for them to understand how all this works with these proxy advisors and these asset managers. That's why we made the documentary, The Shadow State. It was to lift up the hood and shine a light and let people know in fairly intelligible terms what the industry is all about, what their goals are, how it works, and how it affects you personally. It is an arcane system, but it's not that difficult to understand.
Mr. Jekielek: Let's say you're not a state AG or a state controller. You're just a consumer, and you don't like what's happening. What do you do?
Mr. Stocklin: That's a difficult question. At some level, there's not a whole lot you can do. If you want to buy a car, you have a very short list of car companies that you can go to, and they're all more or less on board with this. That's not to say there's nothing you can do. You can look into whether your bank is supporting ESG goals, and most of the big national banks are.
Your alternative is you can bank with a community bank, or you can bank with a local credit union. Patriot Mobile is a conservative mobile phone operator, so you can shift your service to that. If you for some reason don't trust the Walt Disney Company to produce content that's appropriate for your young children, you might look at some alternative content creators who are producing more viable content. There are things that consumers can do on this level.
Obviously, if a lot of these efforts are coming at the state level, that is more power that you have at a local level. You can support state officials and reach out to them and get involved in state elections. There's so many families, and I would include mine as well, that might not have been all that political 10 years ago.
Because of all the things that were revealed about what's being taught in schools during Covid, parents are suddenly becoming political and getting involved with school boards. These systems are very huge, and there's tens of trillions of dollars and the full weight of the government against you. But we're not completely helpless in this, and there are things that people can do even on a local level.
Mr. Jekielek: That's the message that I've been hearing from a lot of people—if you see things you don't like, get involved at the local level. There will be a trickle up effect if a lot of people actually do that, whether it is leveraging their purchasing power or exercising their ability to gain political office.
Mr. Stocklin: As we saw with Bud Light, with Target, and even to some extent with Coca-Cola, they had 30 percent of their customers saying, "We don't appreciate that you're getting involved in state issues with voting rights laws." Consumers can make individual decisions. My sense of this is that consumers are not actually saying, "We want this company to be conservative, to be Christian, or to have any particular view on gender. What consumers are saying is, "If you make beer, just make good beer. That's all I want you to do. If you're Coca-Cola and making fizzy drinks, and just do that. We don't want to have politics shoved down our throat."
Mr. Jekielek: Kevin, this has been a fascinating conversation. Any final thoughts?
Mr. Stocklin: Fundamentally, this is a clash of ideologies. On the conservative side, we have people that believe the purpose of government is to secure our rights, and the purpose of companies is to serve the shareholders. The ESG movement comes from the progressive ideology, which basically believes that we should have experts in companies or government that tell us what to do.
They come up with the best policies, whether it's Covid or ESG. This is the clash of the two ideologies today, much more than Left-wing or Right-wing. This is going to heat up quite a bit in the coming years. You're going to see more state officials speaking up and getting involved. You're also going to see a lot of pushback from the ESG industry to continue to further all this, despite the opposition.
Our founders believed that the government exists to secure individual rights. They don't exist to invest in cars or tell us what kind of cars or stoves we should buy. The best policy is decided at the local level, whether that's education or healthcare. Hopefully, we can get back to a point where the government is doing what it's supposed to do and doing it well, instead of doing a lot of things that it's not supposed to do and messing them up.
Mr. Jekielek: Kevin Stocklin, it's such a pleasure to have you on the show.
Mr. Stocklin: Jan, it's been a pleasure talking to you. Thank you so much for having me on.
Mr. Jekielek: Thank you all for joining Kevin Stocklin and me on this episode of American Thought Leaders. I'm your host, Jan Jekielek.
This interview has been edited for clarity and brevity.