‘Social Responsibility,’ ESG Scores, and China’s Social Credit System

American Thinker ^ | 4 Sep, 2021 | Jack McPherrin

[MtnClimber]

Corporate Social Responsibility, ESG Scores, and China’s latest foray into totalitarianism via its recently introduced Social Credit System share significant commonality.

Corporate Social Responsibility, ESG Scores, and China’s latest foray into totalitarianism via its recently introduced Social Credit System share significant commonality. Each system engenders the same erosion of individual liberty via the propagation of a singular “morality” unilaterally determined by an authoritarian overseer. That the governance structure surrounding the former is made up of economic elites operating from a relatively free society, while the latter is made up of high-ranking governmental officials in a significantly less free society, is immaterial.

Corporate Social Responsibility (CSR) is defined by Investopedia as “a self-regulating business model that helps a company be socially accountable -- to itself, its stakeholders, and the public… to engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment.”

Environmental, Social, and Governance Scores (ESG) are defined as “a set of standards for a company’s operations that socially conscious investors use to screen potential investments.” ESG scores are most commonly used to assess investment risk; a high ESG score is theoretically supposed to indicate a low risk level. However, the score consists of a set of metrics that are highly subjective, and arbitrarily determined by a small group of elites rather than any sort of democratic process.

China’s Social Credit System (SCS) is described as an “important component part of the Socialist market economy system and the social governance system” that hinges upon “establishing the idea of a sincerity culture, and carrying forward sincerity and traditional values” by utilizing “encouragement to keep trust and constraints against breaking trust as incentive mechanisms.” Its ultimate goal is “raising the honest mentality and credit levels of the entire society.”

[MtnClimber]

ESG scores are being pushed by Larry Fink, CEO of Blackrock Investments and has been picked up by Vanguard Investments. If they can’t get communist social justice through congress because it is unconstitutional, then shame companies into imposing it on their employees. I urge everyone not to invest with these companies.

[cyclotic]

Assuming you can’t get a negative number, my ESG goal is zero.

[machman]

So is Morningstar, they spend more time talking ESG gibberish than investment fundamentals.