The push for environmental, social and governance (ESG) standards in the private sector is the “greatest threat” to democracy and capitalism in the United States, said entrepreneur Vivek Ramaswamy.
Programs that the government cannot achieve directly through the Constitution are being pushed by the ESG movement in the private sector, he said. The ESG movement is gaining momentum through “capital aggregation” in the hands of a small number of investment firms, with the three biggest players being Vanguard, BlackRock and State Street. Together, these three companies manage more than $22 trillion, Ramaswamy pointed out in an interview with EpochTV’s “Crossroads.”
“And what these companies do is they show up in the boardrooms of American companies who buy stock in those companies on behalf of ordinary citizens and then tell those companies that, hey, you have to embrace these social or environmental programs. And if you don’t, we’re going to fire you, we’re going to freeze your salary, we’re going to kick you off the board of your own company,” he said.
Such actions by these investment companies have forced companies to adopt programs that not only make these companies “less successful” but also “suck the lifeblood” out of American democracy, he added.
Topics like climate change and systemic racism are issues that need to be addressed through free speech and open debate in civic spheres rather than forced through the boardrooms of American corporations, insisted Ramaswamy.
The entrepreneur also pointed to the “extensive ties” between investment firms pushing ESG and the Biden administration. The Treasury Department, the Council of Economic Advisers and the vice president’s office are all “full” of BlackRock alumni, he said, adding that “it’s a two-way street of capitalism from cronyism”.
Impact on the energy industry, Chinese bias
The industry most damaged in America by the ESG movement is energy, Ramaswamy said. Hoarding capital from ordinary American citizens, investment companies told American oil companies to produce less power, drill for less oil, and fracture for less natural gas.
This has created a “generational energy crisis” in which the country is now suffering from energy shortages, higher gas prices and less successful national energy companies.
Ramaswamy also criticized the double standard of pro-ESG investment firms. These companies only impose ESG constraints on Western companies, but do not “say a word about them to Chinese companies”.
As a result, if Western companies like Chevron or Exxon had to abandon projects to comply with the emissions cap or climate targets, Chinese companies like PetroChina eventually take over those projects.
Although Chinese companies are “much dirtier” than their US counterparts, BlackRock remains silent on China as they have many financial interests in the country. The Chinese Communist Party (CCP) will not grant BlackRock the license to do business in the country if it imposes the same ESG standards on Chinese companies as on American companies, Ramaswamy said.
Therefore, the idea that a free market exists is a “myth”.
Governments on both sides of the Pacific are using BlackRock to advance their interests, with the CCP and the “dominant liberal government in the United States” pushing their own agendas.
BlackRock has therefore become a “political pawn” masquerading as an asset manager, he said.