Elon Musk Slams Woke Trend That's 'Twisted' Corporate America to 'Insanity'
Tech billionaire blasts tend to make corporations more 'socially conscious'
Tech entrepreneur Elon Musk has slammed the rising woke trend in corporate America, arguing that it has been "twisted to insanity."
The Tesla and SpaceX CEO blasted Environmental, Social, and Governance (ESG) standards — a leftist trend that seeks to make businesses more “socially conscious.”
ESG criteria are “a set of standards for a company’s operations that socially conscious investors use to screen potential investments,” according to Investopedia.
To meet the woke criteria, a company may emphasize its use of green energy, association with LGBTQ suppliers, or otherwise arrange its operations such that producing shareholder value is inseparable from a leftist agenda.
Musk slammed ESG on Twitter in response to comments from software engineer and entrepreneur Marc Andreessen.
Andreessen criticized ESG funds’ willingness to “make the weapons required to fight wars with hostile regimes we buy energy from” while simultaneously refusing to invest in energy companies.
Musk pointed out that “ESG rules have been twisted into insanity.”
ESG rules have been twisted to insanity— Elon Musk (@elonmusk) March 8, 2022
The Biden administration has often flirted with pressing American companies into embracing ESG.
In February 2021, Allison Lee — who served as acting chairwoman of the Securities and Exchange Commission (SEC) — directed the Division of Corporate Finance to “enhance its focus on climate-related disclosure in public company filings.”
"Now more than ever, investors are considering climate-related issues when making their investment decisions,” the official wrote.
"It is our responsibility to ensure that they have access to material information when planning for their financial future.
"Ensuring compliance with the rules on the books and updating existing guidance are immediate steps the agency can take on the path to developing a more comprehensive framework that produces consistent, comparable, and reliable climate-related disclosures.”
One month later, the agency again mulled a larger focus on the ESG actions of publicly-traded companies.
“No single issue has been more pressing for me than ensuring that the SEC is fully engaged in confronting the risks and opportunities that climate and ESG pose for investors, our financial system, and our economy,” Lee wrote in an op-ed.
In response, Republican SEC Commissioner Hester Peirce told The Daily Wire last year that the environmental and social categories are both “quite unclear,” and may be “driven by people who want to know the information for other reasons.”
"A lot of the push for new disclosures is being driven by factors other than what normally drives our disclosure requirements, which is, what is material to a reasonable investor,” she explained.
"A lot of people who have concerns about a whole range of issues, social issues or climate issues or whatever, they’re looking at the SEC as the tool to work on those policies.
"It does run the risk of causing the SEC to engage in mission creep, and that’s really problematic, because our core mission is a really important one, and we don’t want to be pulled away from that.”
"Activist investors” have long sought to reform troubled companies by taking over upper management.
However, some modern “activist investors” are — quite literally — “activists.”
Beyond increasing firms’ profits, fund managers are pressuring companies resistant to systemic change into adopting ESG criteria.
For example, Engine No. 1 — an investment firm that believes “a company’s performance is greatly enhanced by the investments it makes in workers, communities, and the environment” — snagged a 0.02% stake in ExxonMobil and sent an activist letter to the Board of Directors.
The woke firm alleged that the oil and gas giant “must change” with the times, eventually clinching three of the fossil fuel company’s twelve board seats.