Zuckerberg and other tycoons say they are abandoning ESG and DEI, but is this true?

Over the past 18 months, the environmental, social and governance (ESG) agenda has suffered setbacks in the form of corporate DEI initiatives, falling investment volumes and the collapse of the net-zero insurance alliance.

Just last month, major banks withdrew from the Net Zero Alliance and Meta canceled many of its diversity, equity and inclusion (DEI) initiatives. ESG seems to be losing touch. But don’t be fooled.

A closer look at banks’ rhetoric reveals they are still filled with die-hard ESG financiers. Many of the touted changes are superficial or cosmetic rather than expressions of underlying philosophical shifts.

Dozens of Fortune 500 companies, including McDonald’s and Walmart, representing trillions of dollars in market capitalization and millions of employees, are canceling or canceling their DEI programs in 2024. Lose cash. The incoming administration has pledged to abandon DEI in federal agencies.

DEI is like an awakened IED fighting for the left against our military. we must dismantle it

The net-zero insurance coalition has unraveled over the past year and a half amid a mass exodus of insurance companies, when many state attorneys general worried that joining such a coalition could violate antitrust and anti-collusion laws. U.S. states have withdrawn billions of dollars from BlackRock over ESG concerns.

These changes are a welcome corrective to the flawed and entrenched ideological goals of ESG advocates. The latest domino to fall is the large U.S. financial institutions. Goldman Sachs, Wells Fargo, Citigroup, Bank of America and JPMorgan Chase have all withdrawn from the global net-zero banking alliance.

Even BlackRock, once a strong advocate of ESG, has withdrawn from net-zero asset management plans. While this seems consistent with other retreats in ESG, cynicism is warranted.

If you look at the press releases from these large financial institutions, you will see that they are unrepentant and still intend to pursue net zero goals. For example, Goldman Sachs stated: “Our priority remains helping clients achieve their sustainability goals and measuring and reporting on our progress.” Citigroup was more blunt: “We remain committed to achieving net-zero emissions.”

I am forced to take action against my school district to stop the forced rhetoric, racist DEI

BlackRock is the most obviously unrepentant. “[O]Your membership in some of these organizations has caused confusion…and subject us to legal investigation… [But this] There will be no changes to how we develop products and solutions for our clients or how we manage their portfolios. .

The moves by these big banks appear to mimic BlackRock CEO Larry Fink’s strategy of not using the term “ESG” because it is a political hot potato but remaining committed to “sustainability.” BlackRock remains heavily invested in green infrastructure and renewable energy projects.

If their clients explicitly ask for such investments, that’s fine. But as American learned last week, retirement fund managers have a fiduciary duty to pursue the best financial returns for their clients, and they can be held liable for using the funds they manage for other purposes.

Nearly Half of U.S. College Students Refuse to Take Mandatory DEI Courses on Campus: Study

While U.S. financial institutions have made superficial progress in withdrawing from the destructive global net-zero alliance, they appear to be insincere when it comes to truly changing their ways. That’s not surprising given the small number of changes in bank staff. We also see no evidence of change on the ESG front.

Instead, they appear concerned about public pressure and criticism from incoming federal and state officials. Leaving these alliances would also allow them to express their intentions for net zero emissions more freely without having to deliver by a fixed date.

But if ESG policies were distracting and damaging before, they remain so now. Ideological ESG priorities can harm a company’s ability to operate well and benefit its contractual stakeholders. It’s hard for companies to make a profit without pursuing a variety of social justice priorities.

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Banks should articulate more clearly their commitment to maximizing shareholder value and doing business with everyone. Pursuing long-term profit success benefits shareholders, workers, suppliers and customers.

Most companies, especially unrepentant financiers, need to clear the house within their HR departments to focus on value creation rather than racial identity politics or expensive virtue signaling on environmental and social issues. As the American Airlines case illustrates, companies that fail to do so may well be in breach of their fiduciary duties to customers and shareholders.

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