Vivek Ramaswamy Traces the Roots of ESG—It's Been Going on a Lot Longer Than We Knew

(AP Photo/Mark Lennihan, File)

At this point, everyone knows about ESG, and everyone knows that companies and firms that embrace it are intent on pushing an environmental, social, and governance agenda, mostly on America. But the full story is very interesting and extremely disturbing.


Recently, I had the chance to hear Vivek Ramaswamy, the founder of Strive Asset Management, speak about ESG, how it came to be, how it functions, and how to combat it.

Ramaswamy said that the problems of ESG are not state or even national economic ones. They make up a transnational, trans-partisan battle for the heart and soul of democracy itself. It is not Democrats versus Republicans, Left versus Right, black versus white, or gay versus straight. Rather, the real issue at stake is democratic-republican self-governance versus monarchy. Ramaswamy said that it is not a 2022 question but a 1776 question. ESG, says Ramaswamy, is a secular religion that started when ideas such as identity and the ability to achieve in life based on race, gender, or sexual orientation rose to the fore.

According to Ramaswamy, there were two toxic ideologies of the 20th century—the first being German Nazism, and the second Soviet-style Marxism. Blend the identity politics of the first with the oppressor-oppressed philosophy of the second and you have planted the seeds of ESG. This, in turn, allows for the application of labels to those who question the new cultural norm. Those labels include, but of course are not limited to, “racist,” “misogynist,” “climate-denier,” and “bigot.” Once those labels are applied, all debate is silenced.

The current problem, said Ramaswamy, began with the 2008 financial crisis. Ramaswamy was working for a Wall Street investment firm. He said anger began to rise when banks received financial bailouts, causing people to begin to question modern American capitalism. It also served as a nursery of sorts to the Occupy Wall Street movement. This movement, running on the fumes of the old progressive ideology, demanded that money be taken from the rich and given to the poor. But the neo-progressive movement was just starting to come into its own, and this movement postulated that the real problem was not poverty or economic injustice but rather racial injustice, bigotry, misogyny, and climate change.


Related: Louisiana Fights Back Against BlackRock for Pushing Woke Agenda

Ramaswamy said that Wall Street saw a way to get off the hot seat. Corporations realized that they could get activists off their backs by doing things such as putting token minorities on corporate boards and championing the combatting of climate change and its supposedly racist impact. But the corporations said that the price would be for the Left to conveniently look the other way with regards to corporate power. In addition to being left alone, these companies also expected that the movers and shakers in government and these movements would give them certain business advantages. Ramaswamy cited a move by Goldman-Sachs in which it said it would not take a company public if it did not have a sufficiently diverse board. Ramaswamy called it a cynical grand bargain or even an arranged marriage between two sides that didn’t even so much as like one another. Ramaswamy likened it to “mutual prostitution,” which resulted in the “Woke ESG Industrial Complex.” This is a far more powerful entity than Big Business or Big Government, which allowed both elements to accomplish together what they could not do on their own.

This created the chance for new asset management companies to ride in on their proverbial white horses in the wake of the ’08 financial crisis. These included companies like BlackRock, State Street, and Vanguard, which would create “better capitalism.” According to Ramaswamy, these three companies, over 15 years, have acquired enough assets to manage more than $21 trillion of investment funds. This money is then used to advance a progressive agenda that would have never survived a legislative session.

Seeing Wall Street’s success, Ramaswamy said that Silicon Valley realized that it would also like a piece of the action. Even back in 2008, the tech lords knew that it was the Left that posed a threat to their burgeoning monopoly on at least a philosophical level. So the tech lords said they would use their corporate power to advance progressivism, doing things like censoring opinions and eliminating “hate speech,” as the Left defined it. In return, the Left would conveniently ignore the tech monopoly.


Seeing how well things worked out for Wall Street and Silicon Valley, much of corporate America would follow suit. Ramaswamy cited Coca-Cola speaking out against Georgia’s voting laws and forcing its employees to take diversity training, including courses on how to be “less white.” At the same time, Coke could ignore its product’s effects on American obesity. Nike could condemn “systemic racism” in America, while people overseas toiled in sweatshops for slave wages and, as Ramaswamy asserted, in conditions of slave labor to make high-end sneakers for sale in the U.S., often to people who might not be able to afford coats for their children.

Even though the two sides still loathe one another, the system, which is the merger of state and corporate power, stays in place because it continues to work so well. Ramaswamy called it the most powerful force in modern American life. Ironically, liberals allowed themselves to forget about their skepticism of big business, and it duped conservatives because the system was presented in the context of the free market. Ramaswamy said that he knows principled people on the left and the right who are deeply concerned about the issue, in part because free speech and open debate in the public square, where all voices and votes count equally, is being neutralized.

That is the “S” or social prong of ESG. Far more sinister, said Ramaswamy, is the “E” prong, or energy. Climate change has been used to envelop the social prong and make it a Trojan horse. The major asset management firms and banks have served as an arm of the government to implement climate change policies, such as the Green New Deal, which could not have passed Congress. Democrats realized that the private sector could be used to that end. Climate Czar John Kerry was able to get companies across the nation to sign a “climate pledge” to put the Green New Deal into effect without any debate or vote in the legislative branch. Ramaswamy said that the tactic has not only contributed to a generational supply/demand imbalance for global energy, but it also hasn’t even been effective. This is because we are in a global energy market, and countries like China and Russia snap up every unit of energy that ESG takes out of play in the West. So, according to Ramaswamy, on the other side of the world, carbon emissions continue unabated. On top of that, Russian and Chinese energy production is much dirtier than it is in the U.S. Methane produced by those countries is far worse than in the U.S.


This, by the way, is the same movement that is vehemently opposed to nuclear energy. Ramaswamy alleged that Vanguard excludes nuclear energy from its index funds. Nuclear energy is carbon-free and sustainable and would also change the balance of energy production. So why the opposition? Ramaswamy said it has nothing to do with energy, the environment, or climate. Rather, climate change is the vehicle used to force the West to apologize for its advancements in human flourishing, under the banner of equity. By making the U.S. and Canada reduce energy production while not applying any standards to the rest of the world, parity can be achieved. Nuclear energy might be too clean and too effective, and should it be embraced, energy can no longer be used to hide a social agenda.

But ESG is not just a domestic issue. Ramaswamy asserted that China is driving the entire agenda and understands ESG better than any other players. The American meritocratic, excellence-centered system has, in his words, leapt oceans to elevate countries like China. By contrast, the Maoist, victimhood-centric hierarchical social credit scoring system has leapt oceans to infect the U.S.

For example, Ramaswamy noted that any time Xi Jinping is criticized for China’s oppression of the Uyghurs, his first move is always to pivot to the idea that the Black Lives Matter movement shows that the U.S. is no better than China. According to Ramaswamy, at the Alaska Summit last year, the top Chinese diplomat said during his opening statement that China hopes the U.S. does better on human rights and wants to see the U.S. “stop slaughtering” black Americans. But our own ESG corporations only apply their standards in the U.S., so legitimate human rights atrocities in China are ignored. Companies like Disney can champion woke causes at home while shooting a movie in the very province where the Uyghurs are imprisoned, sterilized, and subject to forced labor. And then Disney thanked China for the privilege of filming there. All of these companies and firms, including the NBA, continuously criticize the U.S., while saying nothing about China. That, of course, is because American companies want access to the Chinese market. Criticism of the CCP will prevent that access. But China will “roll out the red carpet for companies that criticize the United States. Ramaswamy said that policy erodes our greatest political asset, our moral standing on the global stage. This creates a false equivalency between a nihilist Chinese Communist state and an idealistic American society.


And according to Ramaswamy, the plan is working. He said that BlackRock became the first foreign owner of a domestic, wholly-owned asset management subsidiary business in China. This occurred after BlackRock lobbied for different standards for Chinese companies that want to list in the U.S. BlackRock continues to apply stringent ESG standards for U.S. energy companies such as Chevron and Exxon. But the company is also a major shareholder in PetroChina, which is buying up the same projects that BlackRock has effectively forced American companies to abandon.

What is the solution to defeating this hydra? Ramaswamy says that there is room for citizen-driven solutions through the political process. So yes, get out and vote. But the solutions we turned to in the ’80s when the threat was simply big government do not necessarily apply today. Today we face a hybrid of Big Tech and Big Government. Big tech, for example, is free to censor content since it is made up of private companies. But Ramaswamy said it is also clear that these companies are responding directly to governmental threats and demands to censor people exercising their First Amendment rights. People in private companies are being fired for saying the wrong thing or the accusation thereof. Ramaswamy commented that political beliefs should be protected in the same manner as religion, sex, national origin, and race.

Ramaswamy said that market-driven solutions are required. That is why he founded Strive, to create index funds and compete against firms like BlackRock and Vanguard. He said that Strive delivers a mandate to the companies in which it invests that they are to focus on providing excellent products and services to customers and not advancing a political agenda. The political solution only allows us to make changes during election years, but we vote every day when we decide where our money goes. For the most part, we may not even know that our money is being used to further ESG. While Ramaswamy is taking on ESG through asset management, he says that market changes need to be made across the board. Other sectors need to step up as well. Street-level investors and consumers have a role in making that happen. He called upon Americans to live up to their civic duties and reestablish a country where anyone can be a success, no matter their race or sex.


Ramaswamy’s message is not going unheard. The Washington Examiner reports that Louisiana’s State Treasurer, John Schroder announced last week that the state will be liquidating its funds and pulling out of BlackRock. This will cost BlackRock around $794 million in the coming months. Schroder told BlackRock CEO Larry Fink:

Your blatantly anti-fossil fuel policies would destroy Louisiana’s economy. This divestment is necessary to protect Louisiana from actions and policies that would actively seek to hamstring our fossil fuel sector. In my opinion, your support of ESG investing is inconsistent with the best economic interests and values of Louisiana.

West Virginia Treasurer Riley Moore’s office has been given the power to mark BlackRock, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo as ineligible for state banking projects because of their stance on domestic fossil fuels and their relationships with China. Earlier in the year, Utah State Treasurer Marlo Oaks announced that he was pulling state assets from BlackRock and similar firms. You can read the letters he has sent to multiple entities here.

The Washington Examiner also notes that BlackRock has launched a web page refuting claims that it is boycotting fossil fuels. The firm maintains that investors have a variety of choices when it comes to their investments and boasts that it has invested $170 million in the U.S. on “ pipelines and power generation facilities.” BlackRock does say that it believes that companies that “better manage their exposure to climate risk and capitalize on opportunities will generate better long term financial outcomes.”

Ramaswamy has a valid point: you can make a change, or at least get in the fight by changing who manages your portfolio and where you do your banking and spend your money. And it is also essential that entrepreneurs step up to create new companies and new ways of doing business. But there is a political component. I’m not talking about who your state sends to Congress, but note that the public officials who are actually making a difference are at the state level—specifically, state treasurers. Who you elect to send to D.C. matters. Who you elect to fight at home matters even more.



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