This is an opinion editorial by Macro Jack, a Bitcoiner with a background in traditional financial services spanning investment research, investor relations, and business development.
Environment, Social and Governance (ESG) is an approach to assessing companies or countries based on their alignment with these three factors. Increasingly popular in recent years, ESG has become a globally adopted framework and a focal point of capital allocation. The concept seems innocuous on paper since most people are good and want to advance environmental or social issues. Even better if we can do it through investments. However, the introduction of a monetary reward for ESG followers introduces a whole new set of incentives that probably haven’t been thoroughly examined by the investment community.
There is more than meets the eye. THE G assessment process is arbitrary, opaque and centralized, leaving plenty of room for corruption. It is also suspicious that one of the main proponents of ESG is BlackRock CEO Larry Fink. BlackRock is the world’s largest asset manager, managing more than $10 trillion, and Mr. Fink’s lifestyle reflects that. He likes to take the private plane to Davos, relax in his Aspen mansion and tell you to reduce your carbon footprint.
Digging deeper into the ESG reveals a more sinister plan. While we want to be good stewards of the planet, we are quickly learning that the globalists’ proposal to do so is quite disturbing and also illegitimate. ESG is an essential part of the program to consolidate capital and centrally plan the allocation of resources, thus destroying the vestiges of the free market. Let’s dig a little deeper.
ESG is more than an approach to evaluating investments; it is a social credit system similar to that which exists under the Chinese Communist Party. Similar to a credit score that determines eligibility for loans based on one’s past ability to repay debts, a social credit system is a more invasive scan and determines access not only to financial services, but to services as well. public transport, such as public transport or grocery stores. . For example, China’s social credit system seeks to compile digital records of citizens’ social and financial behavior to calculate a personal score that determines the services to which they are entitled. Speak the wall street journal, China’s official social credit system incorporates loan repayment, credit card bills, compliance with traffic rules, adherence to family planning limits, and the “reliability” of information posted or re-posted online, among others. factors. In addition to official contributions, Social Credit incorporates political dissent, personal values, and online discourse into one’s score. A person’s beliefs, political opinions and online behavior determine their ability to access services such as insurance and banking, school admissions, internet services, social services and eligibility to work.
Social credit is a system that determines access to goods and services at the individual level, while ESG determines a company’s ability to access capital. Ultimately, rather than a company providing a product or service demanded by the market, companies succeed based on their ability to compromise on values and embed an ESG agenda. According to an ESG standard, success is no longer based on delivering products and services to market but on allegiance to the ruling class. ESG is a return to the monarchical model, allowing an elite to allocate capital to causes that further enrich them in the name of “social good”.
Not only does the ESG system consolidate the capital of the ruling class, it is also effective in destroying wealth nationwide. For example, Sri Lanka’s ESG score was 98.1 before its collapse. Global economic research explains the score. A high emissions index (close to 100) indicates a low environmental impact for the country. The emissions index is based on the equal weighting of carbon and methane emissions.
Sri Lanka’s collapse is partly due to the government’s decision to force farmers to switch from chemical fertilizers, which use natural gas as a key input, to organic fertilizers in April 2021. This mandate reduced crop yields and led to less food, which resulted in Sri Lanka depleting its foreign exchange reserves to import food. In two years, Sri Lanka’s foreign exchange reserves have been exhausted from $7.6 billion in 2019 to $50 million by the end of 2020, a decrease of approximately 99%. During all this time, the country had $81 billion in debt and food prices have almost doubled.
On the contrary, the ESG score tells us that it can be a counter-indicator of a country’s economic health, indicating a lack of reliable food and energy. Another recent ESG development has been the recent decision by the Dutch government announcement of their plans to reduce nitrogen emissions by 50% by 2030 and Canada fertilizer cut proposal 30% emissions. In the Netherlands, the scapegoat is cattle and a reduction in herd sizes will bankrupt many farmers, increasing food insecurity around the world and making beef artificially scarce. By succumbing to ESG pressures, companies and countries don’t prosper, they collapse. Rather than raising all tides, they sink all ships.
At the corporate level, the ESG agenda is feasible because the stock market, i.e. passive investing, has been promoted as the best way to build wealth, especially in the United States. Passive vehicles such as exchange-traded funds have been championed by BlackRock and other companies. . for their simplicity and have seen massive growth in demand over the past decade. However, the unspoken consequence of passive investing is that shareholder voting rights are now concentrated on those asset management giants, who use the votes to implement their ESG agenda. ESG cronies are appointed to leadership and leadership positions, destroying the remnants of capitalism. Rather than creating shareholder value and increasing overall wealth, corporations are forced to focus on “stakeholder capitalism,” resulting in woke capitalism. Companies must succumb to Marxist ideologies to maintain a link to the monetary window. ESG is a social credit system masquerading as a “social good”. A new form of crony capitalism, based on allegiance to globalists and masked as a virtuous cause.
The root cause of the spread of Marxism in the capital allocation process is debt-based fiat money. Because inflation is programmed into our currency, savers are forced to invest in Wall Street products to preserve their purchasing power. Inflationary money monopolized by central banks is a problem Wall Street is eager to solve and their solution allows them to use the voting power of shareholders to advance the ESG agenda. The need for a savings technology independent of the depreciation of fiat currency and Wall Street financial products is evident.
Enter Bitcoin, a savings technology that will free us from attack vectors from globalists, including ESG. By restoring the base layer of civilization with solid monetary technology, Bitcoin saves us money in the long run. There is no need for Wall Street products on a bitcoin standard since there is no central authority, such as the Federal Reserve, diluting supply. Bitcoin is programmatically rare. There will only ever be 21 million bitcoins and monetary policy is completely transparent and inelastic to variations in demand. Just as gold was selected by the open market as a currency due to its salability in space, bitcoin is also being adopted as a savings technology. There is a growing demand for sound money as fiat currencies trend towards zero. As the demand increases over time and the supply issue decreases, the price will rise. Bitcoin is the savings technology humanity needs to thrive.
Before people point out the obvious, it’s worth pointing out that the price of bitcoin is volatile. The price of bitcoin is decreasing in dollars due to the instability of the fiat financial system. However, bitcoin is only 13 years old and not yet a unit of account. As is well understood in the bitcoin space and the Austrian economy, silver follows an adoption curve: first as a collectible, then as a store of value, then as a as a medium of exchange and finally as a unit of account. Bitcoin’s predecessor, gold, has gone through this monetization process for thousands of years. Bitcoin adoption is progressing much faster. As it progresses through the monetization process, it will become more stable in terms of dollars. Remember that it is still stable in terms of bitcoin; 1 bitcoin = 1 bitcoin.
To conclude, restoring sound money as the base layer of civilization eliminates theft from the monetary system. Unlike central bankers who devalue your savings and force you to speculate on Wall Street commodities to preserve purchasing power, bitcoin exists as an alternative for storing value across space and time, defunding the Cantillonares and destroy the ESG in the process.
This is a guest post from Macro Jack. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.