Former Vice President Mike Pence joined the rising anti-ESG (environmental, social, and governance) bandwagon on Thursday with a Wall Street Journal op-ed slamming the strategy as political rather than investing.
“Paychecks will no longer be based on an employee’s performance but on how well they conform to the woke political opinions of their supervisors.”
Mike Pence
“I’m old enough to remember when liberals accused big business of consistently being on the side of Republicans,” Pence began. “But in 2022, the woke left is poised to conquer corporate America …”
Assets in ESG and sustainable funds reached almost $4 trillion in 2021, Morningstar figures show, although demand has waned somewhat in the wake of Russia’s invasion of Ukraine.
Nonetheless, Pence downplayed its popularity, claiming a “sudden abundance of liberal shareholders isn’t what’s driving this new trend of woke capitalism, and it certainly isn’t a reflection of consumer demand.”
He then blamed a “handful of very large and powerful Wall Street financiers” for its rise and “an unelected cabal of bureaucrats.”
Echoing recent comments from billionaires Elon Musk and Peter Thiel, he called ESG “a pernicious strategy” that allows the liberal left to accomplish through free markets what it can’t win with elections.
Chinese communist comparisons
Referencing Tesla’s exclusion from the S&P 500 ESG Index last week, he further blamed the bad-faith targeting of Musk’s commitment to free speech and his criticism of the Biden administration.
And like Thiel, Pence compared ESG to the social credit scores issued by the Chinese Communist Party, arguing that “a low ESG score can be devastating, making it virtually impossible for a company to raise capital—and that is exactly the point.”
Ironically calling for government intervention, he said the ESG craze would worsen without it. He referenced a recent announcement from Mastercard that said it will begin to link employee compensation to ESG goals.
“In other words, paychecks will no longer be based on an employee’s performance but on how well they conform to the woke political opinions of their supervisors.”
Noting that states with large employee pension funds would be wise to “rein in” massive investment firms and their ESG activity, he aimed at the big three—BlackRock, State Street, and Vanguard—and their $22 trillion in assets.
“State and local governments should entrust their money to managers that don’t work against their residents’ best interests,” Pence concluded. “States should also pass model legislation developed by the American Legislative Exchange Council requiring government pension-fund managers to vote the state’s shares, rather than delegating that authority to huge Wall Street firms.”