Environmental Social Governance Scoring (ESG)

I am opposed to ESG scoring.  What is ESG?  Environmental Social Governance Scoring is a way to track how well companies are doing with environmental issues (primarily fighting climate change and meeting environmental goals), social issues (are you "woke" enough), and governance issues (are you making sure your employees are doing their part in the Environmental and Social issues) as well as how diverse your leadership is. 

 

A summary of ESG by those who believe in it is found in a paper from the Harvard Law School (https://corpgov.law.harvard.edu/2020/08/01/introduction-to-esg/).  ESG is a way to score businesses for how they are doing in being good citizens in the world rather than if they are making money for their stockholders.  Thus your social scores become more important than (or at least as important as) your ability to make money for your investors.  The problem comes in the criteria being used and how it is applied.  The criteria are based on the belief that climate change is an "existential" (world ending) threat and that the current "woke" agenda includes the proper criteria for judging businesses and that it is their right to impose their views on others.  There is currently a bill in Congress called the Fair Access to Banking Act that would prevent discrimination by banks and financial institutions against businesses that are constitutionally protected, law abiding operations.  Given the climate in Congress (Democratic control) it is unlikely that the bill will be passed before a new Congress and President are elected.  As such this issue needs to be addressed by the state so that discrimination against businesses that are not favored under ESG criteria are not cut off from loans and other assistance they need to operate and be successful.

The ESG criteria for Environmental includes carbon footprints (how much carbon do you generate), greenhouse gas emissions, deforestation, biodiversity, climate change, and so forth.  The criteria for the Social scoring include racial justice, board diversity, and other social justice issues.  One of the criteria under the Governance criteria is political contributions and lobbying.  This should send shivers down your back.  It is a back door way to force your business into compliance with Green New Deal philosophies and social justice ("woke") criteria.  The next step is to move this scoring system to individuals and control your personal access to finances, insurance, professional licenses and commerce in general.  Those using ESG will use things like your political contributions and lobbying efforts to judge and score you and your company.  China is using a similar system to track their citizens and score them based on their political leanings.  I don't view this as a good advancement and I am opposed to the whole system being applied for decisions regarding the provision of services to businesses, families or individuals.

I am not opposed to voluntary use of these guidelines and if large companies want to brag to investors about how well they are doing meeting the goals more power to them.  The problem comes when they begin to tie the ability to get loans for business operations, insurance policies, or professional licenses to ESG scores.  Then businesses and individuals who aren't meeting the goals of the current fad for scoring can't get services because their ESG scores are too low and their risks are deemed to be too high due to political reasons rather than the ability to repay the loan or use the service.  Large businesses will have the money to buy items that glean favor from the liberals (such as fleets of electric cars) that raise their scores whereas most small businesses may not be able to make such investments.  This would force small businesses out of business.  Another proposal is to tie interest rates on loans to ESG scores.  How would the score for arms manufacturing, timber (remember deforestation?) or the gas & oil industry be set?  If banks begin to use these scores to decide who gets loans or access to their own money in the banks - where does that leave conservative businesses that also donate to conservative causes.  This allows big banks (or insurance companies, or any other business) who use ESG scores to deny loans to these "less desirable" companies (who may be more desirable to Idahoans) simply for being associated with the political party out of favor.

ESG scores should never be used for making decisions on loans, insurance, or any other business service that a company (or individual) is seeking.  We need to outlaw ESG scoring in business decisions.  If investors want to use it to select among companies they support, great, but keep it out of the lives of everyday citizens.  What happened to the Canadian Truckers is what happens to you when ESG scoring is used against the people.  The only extra thing Trudeau used was arrest of those thought to be "undesirable".  If ESG scores can be used by business against the people, how far is it until they are used by big government to decide how desirable you are to their society and begin to restrict your access to loans, licenses, banking, housing, and so forth?

 

Idaho needs to notify big banks and others that ESG may not be used in Idaho to restrict the ability of our citizens to receive services from any business - including large "woke" corporations.