Society diversity

ESG scores are similar to China’s social credit system, designed to transform society, says think tank director

According to a director of a conservative think tank, major financial institutions and global organizations are using a corporate rating system to create a type of social credit system designed to influence behavior and transform society.

Environmental, social and governance, or ESG, scores effectively assess the social responsibility of entities ranging from businesses to governments. Factors such as reliance on renewable energy sources or the strength of diversity policies can influence ESG scores.

“The goal is to transform all of society, not just to transform what happens inside the walls of a large corporation,” Justin Haskins, director of the Socialism Research Center and editorial director of the Heartland Institute told Fox News. .

Haskins compared ESG scores to a social credit system developed in China. The Chinese Communist Party announced a moral ranking system in 2014 that monitors individuals, government organizations and businesses ranks them based on their social credit, according to the South China Morning Post.

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“I don’t believe ESG scores are really used for what they say they are,” Haskins told Fox News. “I think it’s mostly about controlling society…and pushing a leftist agenda.”

“They think to deal with something like climate change, to deal with pollution issues, to deal with social inequality and racism and all that other stuff, you have to create a credit scoring system. social, otherwise these companies aren’t going to do it on their own,” added Haskins.

He pointed to several large organizations that are pushing to expand the influence of ESG scores, including the World Economic Forum and the Council for International Affairs.

Initially, companies paid outside companies to assess their ESG position in order to attract socially responsible investors. But the metric has since expanded.

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Merrill Lynch, in partnership with MSCI, added a new feature in 2021 that assigns customers personal ESG scores according to their investment portfolios. And a FICO analyst predicted that ESG data would be used in “more granular lending and investing decisions.”

“An example would be the inclusion of property energy rating data in the mortgage valuation and decision, and CO2 emissions data for small businesses,” the analyst wrote. “In the longer term, we expect ESG and climate risk assessments to be an integral part of credit risk and affordability assessments.

Haskins believes ESG scores will soon apply to individuals.

“If you want to transform society through a social credit scoring system, you can do it largely through corporations, banks, financial institutions, and Wall Street, but at some point you’ll probably have to also apply this to individuals,” Haskins told Fox News.

“The average American doesn’t have the power to force these companies to stop doing this,” Haskins added. “You’re going to be impacted by it whether you like it or not, and the rules can change at any time.”

He also said that companies’ ESG standards rating “is a critical part of what they call stakeholder capitalism.”

“They think we need to move to a new kind of capitalism, one that doesn’t just look at profit and loss and traditional business metrics, but looks at what’s in the best interest of the collective,” Haskins said. .

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Klaus Schwab, Founder and Executive Chairman of the World Economic Forum written in 2019 that ESG scores are necessary for stakeholder capitalism.

“‘Stakeholder capitalism’, a model I first proposed half a century ago, positions private companies as trustees of society and is clearly the best response to social and environmental challenges. today,” he wrote. “We must seize this moment to ensure that stakeholder capitalism remains the new dominant model.”

Meanwhile, a 2020 KPMG study found that about 80% of companies around the world sustainability report.

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Haskins also pointed out that major ESG proponents do business with China.

“The same people who are supposed to use these ESG scores to make sure they only do business with moral companies, are also doing business with very immoral people like the Chinese government,” he told FoxNews.

BlackRock, the world’s largest asset manager and a great defender of ESG rating, has a significant stake in China. In 2021, for example, he became the first wholly owned mutual fund company in the country, injecting billions of dollars into the world’s second-largest economy, according to Reuters.