On ESG or wokeness in capitalism

In recent years the Republicans have been pushing back hard against ESG (environmental, social and governance) in investing and corporate governance, branding it "wokeness" in capitalism. They have had some success. At the very highest level I have interpreted the turn towards ESG in corporate governance as a reflection of the monied portion of the electorate getting annoyed and frustrated at the inability of our legislatures to work together to compromise. Additionally, I think the educated have been frustrated with the way that demographic trends (the tendency of productive economies to cluster ever more tightly in and around a few cities) have intersected with constitutional provisions (the electoral college) and sheer Republican craftiness/genius in capturing state legislatures and then gerrymandering the fuck out of everything.

So if the affluent haven't been able to get the government to do what they want it to, we've turned to other means (ESG and shareholder proposals) to push corporations to effect broader policy aims that we'd like to see come to pass. One of the big problems here is that people who work in the private sector on balance do so to earn money and thereby advance their own private economic motives. So using ESG to effect public goods is pushing these people and institutions in a direction not native to them.

Another big problem is that all these ESG proposals compelling corporations to report on this or that metric create mini-bureaucracies inside the companies. And if the ESG aims sought are non-standardized, they are bespoke mini-bureaucracies. It is not unlike the effect of the Trump administration preference for bi-lateral treaties (US-Thailand, US-Malaysia, US-Vietnam, US-Mexico etc) instead of multilateral ones (TPP, NAFTA). These create more regimes for corporations to comply with and therefore inherently raise compliance costs, which are passed on to consumers.

Then again, effecting social change through the actions of multiple on multiple stakeholders (ESG campaigners vs. corporations) has an inherently bottom up feel to it. We know that ultimately change is very hard to force top down. It can be led top down by great leaders at moments of clarity and consensus, but it cannot be forced. Bottom up bends the needle more sustainably and meaningfully over time. 

The pushback from the right is all part of the great contest of ideas and is ultimately fruitful.