Washington, D.C. — Senator Ted Budd (R-NC) has written an opinion piece for the Washington Examiner detailing the toxic nature of environmental, social, and governance (ESG) initiatives and urging good companies to return to the basic principles of business: serve your customers and deliver value.
Highlights:
“Whether it’s climate policy, race relations, or radical gender ideology, ESG has begun to displace the traditional business principles upon which successful companies were founded.”
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“[Bud Light] violated the basic tenets of business, which are to know your customers, serve them, and deliver value. To abandon its customer base and imply that it needs to be rebranded is particularly disrespectful, and customers rightly rebelled. This should serve as a warning for corporate America: Personnel is policy.”
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“When companies stray from their customer base and lose focus on their core principles, they draw the ire of the people and their elected representatives.”
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“The fundamental truth is that to be a successful business of any size, you must be a good corporate citizen. You have to serve your customers, work hard, comply with the law, and deliver value for your shareholders.”
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“It is ESG that damages the entire free enterprise system by misleading good companies to prioritize politics over profit. In the end, this approach will leave our country less prosperous and our people worse off. We must reject ESG and get back to basics if we are to save capitalism.”
Read the full op-ed HERE or below:
Businesses should reject ESG and get back to basics
By Sen. Ted Budd
November 20, 2023 06:00 AM
Just 20% of people consider our economy to be excellent or good, according to the latest Gallup survey. They have every right to feel that way. President Joe Biden ’s economic plan has resulted in about a 3% drop in average wages — in real terms, adjusted for inflation — since 2020, while the costs of everyday goods have increased dramatically. Right now, too many working families are paying more and earning less.
Given this economic pain, one would think the most straightforward solution would be to tackle inflation at the source by reducing government spending to get prices down and reducing taxes and regulations on job creators, freeing them up to hire more workers and raise wages.
But many on the “woke” Left have a different focus. Their priority is to implement so-called environmental, social, and governance, or ESG, initiatives. This set of goals prioritizes social and political activism above all other factors. Whether it’s climate policy, race relations, or radical gender ideology, ESG has begun to displace the traditional business principles upon which successful companies were founded.
This shift means the power brokers in large corporations are no longer the CEO or the COO but the public relations manager. A prime example of this is the backlash that occurred after Bud Light partnered with transgender activist Dylan Mulvaney for a social media campaign earlier this year. The campaign backfired spectacularly, driving millions away from the beer and causing Anheuser-Busch InBev, Bud Light’s parent company, to lose 13.5% of its revenue in quarter three this year.
But the real story here is that the primary decision-maker was a Harvard-educated marketing officer at the company who admitted prior to the ad campaign that she believed Bud Light was culturally “out of touch” and “fratty” and that her goal was to change that. Read another way, the goal of the campaign was to move a right-of-center, working-class brand to the elite, “woke” Left.
She and the company violated the basic tenets of business, which are to know your customers, serve them, and deliver value. To abandon its customer base and imply that it needs to be rebranded is particularly disrespectful, and customers rightly rebelled. This should serve as a warning for corporate America: Personnel is policy.
Toxic ESG policy is also invading banks and financial institutions. When Silicon Valley Bank crashed earlier this year, it set off a panic in the financial system. As it turned out, SVB did not have a chief risk officer for much of 2022, and its risk committee was not composed of anyone with risk management experience. But SVB did mention ESG in its proxy statement at least 40 times, and two-thirds of the membership of the risk committee ran the bank’s ESG committee. Given these facts, it’s easy to see how misplaced the priorities were at SVB.
Some banks and financial institutions are actually going further and picking sides in policy debates. ESG is not simply a risky distraction to these entities. It has become an affirmative choice. For example, On Sept. 9, 2022, the New York-based Amalgamated Bank announced that its petition to the International Organization for Standardization for a new merchant category code for gun stores and ranges had been accepted. This new policy would make it much easier for lawful buyers and sellers to be tracked and possibly discriminated against when they exercise their Second Amendment rights.
Given Amalgamated’s public commitment to “sustainable organizations, progressive causes, and social justice,” it should surprise no one that it is doing in the private sector what liberal politicians such as Sen. Elizabeth Warren (D-MA) have crusaded for in the halls of the Senate. Their former director of public relations even went on to become the executive director of the far-left gun control group Guns Down America.
What’s worse, the “woke” Left is gaining ground in this cause. Earlier this year, Discover Financial Services announced that it, too, would adopt a new merchant category code for gun retailers.
The good news is that while the Left is on the march at the federal level, the states are forcefully fighting back. When it comes to gun rights, Florida passed and signed a law earlier this year that instituted up to a $10,000 fine for tracking firearm and ammunition sales in Florida. Similar laws were passed in Texas and Mississippi , and other states are considering proposals to do the same.
In other cases, consumers themselves are flexing their muscles. Anheuser-Busch is the perfect example of this. When companies stray from their customer base and lose focus on their core principles, they draw the ire of the people and their elected representatives.
What is most perverse about the pro-ESG position is the assumption that business is inherently toxic and ESG is the cure. Purveyors of this view have it backward. The fundamental truth is that to be a successful business of any size, you must be a good corporate citizen. You have to serve your customers, work hard, comply with the law, and deliver value for your shareholders.
It is ESG that damages the entire free enterprise system by misleading good companies to prioritize politics over profit. In the end, this approach will leave our country less prosperous and our people worse off. We must reject ESG and get back to basics if we are to save capitalism.
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