REUTERS
This is an adapted excerpt from “Go Woke, Go Broke: The Inside Story of the Radicalization of Corporate America” (Center Street, August 6).
Whether it’s channeled through ESG or DEI, corporate wokeism is a farce on so many levels that it’s hard to keep track.
Google is said to be a paragon of ESG compliance (what’s the carbon footprint of a search engine?). Yet it’s one of the worst enforcers of speech codes among its employees, as the sad situation of James Damore shows.
He was a Google engineer until he decided to write a memo assailing the left-wing bias in the Google corporate culture. That’s when he was fired.
And you wonder why many employees are afraid to speak up when management brings in some CRT scholar to enlighten them on their systemic racism.
Like Google, Apple and Tesla too are the very models that corporate wokeism works; they’re companies with soaring valuations and a devotion to doing good (even if they do business with China), particularly when it comes to the environment. iPhones don’t pollute, and neither do EVs. Right?
Execs at both companies would eagerly agree. Apple, in fact, has signed on to Business Roundtable’s stakeholder capitalism pledge to “protect the environment by embracing sustainable practices across our businesses.”
Here’s the inside scoop on their business models, as explained by none other than Larry Fink, the CEO of BlackRock, the world’s largest money management firm.
The popular view, particularly on the right, is that Fink, the most powerful financier on the planet, is also ESG’s biggest defender and a progressive zealot.
Fink and BlackRock are indeed powerful: $10 trillion in assets under management in 2024 means they own pieces of just about every public company on the planet.
That power extends to Fink’s political influence; he has major politicians, the president even, on speed dial. He’s also been among ESG’s most influential advocates.
I’ve known Fink for years and I can also tell you he’s much more of a political moderate than he appears, and his allegiance to ESG has become much more nuanced than his critics contend.
He’s also among the most astute observers of boardroom behavior alive today.
Fink recently confided to me how ESG is somewhat of an absurdity, though he didn’t use those exact words. Instead, he explained how ESG-compliant iPhones and electric car batteries are built.
You need to mine minerals like lithium, copper and even gold. The mining is done in Africa in appalling slave-labor-like conditions.
It’s also done in a way that produces tremendous greenhouse emissions and pollutes the air and water with chemicals. The biggest companies doing the mining are from China, not exactly our best friends.
And that’s Larry Fink. The repulsive underside to ESG is that while it’s making many in corporate America rich, average Americans may be going broke from it.
And not just from inflation. Plenty of data shows an interesting correlation between corporate America’s embrace of ESG, stakeholder capitalism and DEI and average Americans suffering from falling wages, analysts say.
They referred me to an interesting chart by an outfit called Statista. It tracks the “Aggregated CEO-to-worker compensation ratio for the 350 largest publicly owned companies in the United States from 1965 to 2022.”
Indeed, between 2016 and 2022, a time when stakeholder capitalism began and corporate wokeism exploded, the income gap between top earners and the working class exploded as well, expanding a whopping 47%.
It’s the largest spike in income inequality in recent history.
You can make a good case that ESG alters corporate incentives enough that productivity declines precipitously under the weight of its various edicts, and the middle and working class suffers as oil companies scale back drilling for oil and car makers are forced to make expensive and inefficient electric vehicles.
Remember: Higher inflation translates into a regressive form of taxation for anyone but the rich, because people with money can speculate in stock investing; the rest of us can’t afford to fill up our tanks.
And if ESG and woke capitalism was so good, why are CEOs in corporate America still primarily white and male?
And why are so many average dudes collecting unemployment checks because of the fentanyl crisis or racial-and gender-based quotas?
Why are black poverty levels still too high?
Maybe because woke capitalism doesn’t work.