20 Sep The ESG Revolution “Evolves”
The following commentary/forecast is one I wrote in my capacity as a senior fellow at “the nation’s oldest consumer protection agency,” Consumers Research, where, among other things, I compile a weekly letter for public pension-fund managers. I am sharing it here today because I thought it might be useful to some of you.
Today’s edition contains themes and ideas that will be deeply familiar to regular readers but that, it would seem, are yet to be learned by countless others.
Guillotining Brian Moynihan
Thousands of climate protestors descended on New York City over the past several days to celebrate “Climate Week,” which was conveniently timed to coincide with the meeting of the United Nations General Assembly. After marching around town on Sunday and milling about Wall Street on Monday, the climate hordes spent Tuesday making a nuisance of themselves at Bank of America’s headquarters:
Many gathered outside the Bank of America tower near Bryant Park. Protestors rallied outside, at times even blocking its entrance, hoping their message is loud and clear.
“We’re here to show they have blood on their hands,” one protestor said.
Twenty were arrested.
“They’re funding more fossil fuel projects. That’s why we’re doing this,” one protestor said.
Such protests are troubling. For the employees of the picketed sites, they are annoying and frustrating. They can also be quite dangerous, in the event of an emergency. More than anything, though, this particular protest was hilarious. Uproariously, knee-slappingly hilarious.
Larry Fink and BlackRock tend to get the most attention in the ESG and anti-ESG spaces – and for good reason. Nevertheless, it is highly unlikely that there is any single CEO in American finance more interested in and more dedicated to normalizing strict ESG and sustainability behaviors across the business spectrum and around the globe than Bank of America CEO Brian Moynihan. Moynihan is a true believer, not just in the urgency of the fight against climate change but also in the ability of financiers to enforce the behaviors necessary to end man’s cruel reign over the planet and to stop global boiling.
For years, Moynihan has worked directly with Klaus Schwab and the WEF to create international standards to impose on corporations, presuming to usurp the power of investors to judge a company’s worth and the power of voters worldwide to determine their nations’ policy agendas. As the chairman of the WEF’s International Business Council, Moynihan has – in conjunction with Schwab – ceaselessly endeavored to compel corporations to bend to the will of the “Davos Elite.” This year, while Fink and others have been hedging on ESG and running away from the term, Brian Moynihan, by contrast, has been doubling down:
Bank of America Chief Executive Brian Moynihan said Wednesday that current efforts to produce a set of official global standards on ESG issues were vital to “align capitalism with what society wants from it.”
In 2020, Moynihan — who is also chair of WEF’s International Business Council — and WEF founder and chair Klaus Schwab worked with the big four accountants to create a set of common stakeholder metrics for companies to follow.
He said it was now important to “go to the official side” and was supporting the new International Sustainability Standards Board set up by non-profit the IFRS….
Moynihan also said it was crucial that sustainability and ethical standards became official and global.
He said informal standards-setting meant companies could hide poor sustainability practices “further down the stream” of their supply chains or divest certain assets, or else claim they are too small to carry out checks.
But with standardized, cross-jurisdiction rules that are part of companies’ annual reports and audited, he continued, “then frankly, an investment manager, a consumer, society, others can sit there and say, here’s a line that is acceptable and you’re either above it or below it.”
“If you’re below it we shouldn’t do business with you, and if you’re above it, tell us how you’re making progress along these important things.”
“Which, at the end of the day, will align capitalism with what society wants from it and get us going faster.”
THIS is the guy with whom the climate protestors are unhappy. THIS is the guy whose offices they picketed. THIS is the guy they think is destroying the world.
Again, hilarious.
It may be too late for Brian Moynihan, but the rest of the business world’s executives can learn an important lesson from the climate crowd’s targeting of Bank of America. Revolutions, you see, are unpredictable, and often they twist and turn, folding back on themselves repeatedly. Before embracing the new world order (whatever the flavor of that order may be on any given day), consider the words of Jacques Mallet du Pan.
Mallet du Pan, you see, was a Genevan journalist, a Royalist who witnessed and wrote about the French Revolution. Among other things, he noted that revolutionaries are never satiated. They are never satisfied with their “progress” and never satisfied for long with the revolutionary spirit of those who endeavor to lead them. “Like Saturn,” Mallet du Pan wrote, “the Revolution devours its children.” Or, to put it more simply, “the revolution always eats its own.”
Therein lies a nugget of wisdom that only history can teach.
As Mallet du Pan saw, the leaders of the French Revolution were radicals, fanatics who intended to destroy the old order and begin the world anew. Steeped in the ideas of such philosophers as Voltaire, Rousseau, and Denis Diderot, they sought to establish a new, unprecedented order based exclusively on “science and reason.” Over the first three years of the Revolution, the National Assembly did, indeed, thoroughly destroy the old order. The Assembly abolished feudalism and embraced a declaration of the “Rights of Man” that provided every citizen with a license to react to any perceived infringement on his or her “rights” by any person or any governmental body with force if necessary. It seized the property and took over the management of the Church. It then issued a paper currency backed by the confiscated Church assets. Predictably, the currency proved to be worthless and, as such, promoted inflation and exacerbated the existing civil discord. Finally, on September 3, 1791, the Assembly adopted a constitution that retained the monarchy but vested virtually all power in a new Legislative Assembly.
But while it is easy to destroy the old order, it is not so easy to create a new one. As it turned out, the Assembly could assign its new order all the power it wanted, but it didn’t have the ability to make that power a reality, to turn its new constitution into the law of the land.
The largest factions within the Revolution were frustrated, seeing the new constitution as a betrayal. The largest of these frustrated factions was the Jacobin Club, which dominated the Paris Commune and was, therefore, the de facto ruling body of the city of Paris. By the middle of 1792, the Jacobin Club had decided that it could no longer support the Assembly or the new constitution. They stormed the Hȏtel de Ville, where the King and the Queen were housed, and seized and imprisoned them. Over the next several weeks, the Jacobins dissolved the Assembly, declared the establishment of a Republic, and established something called the National Convention to rule the country on behalf of “the people.”
The Jacobins also arrested and murdered scores of royalty and clergy, which their nominal leader, Georges Danton justified, declaring: “These priests, these nobles are not guilty, but they must die, because they are out of place, interfere with the movement of things, and will stand in the way of the future.” Three months later, they established the Orwellian-named “Committee for Public Safety” and began attempting to restore order.
Within a few months, the Jacobin-led Committee had decided that strong action was needed to preserve the Revolution, and so it launched what would become known as “the Reign of Terror.” Unfortunately for Danton, the Committee was overseen by one of his chief rivals within the Jacobin Club, a man named Maximilien François Marie Isidore de Robespierre. During this period, Robespierre “protected” the Revolution by slaughtering some 40,000 French men, women, and children, at least 16,000 of whom were guillotined. On April 5, Robespierre turned his attention to his fellow Jacobins whom he saw as a threat. Danton himself was labeled insufficiently revolutionary and was beheaded alongside the man who sparked the storming of the Bastille, Camille Desmoulins. The Revolution had “evolved.”
Three months later, Robespierre himself was guillotined.
Over the span of 10 years, the French Revolution devolved into mass murder and quasi-religious radicalism, and it turned on itself repeatedly, prompting Mallet du Pan’s observation.
But revolutions are like that. All revolutions. Yesterday, Brian Moynihan was the man who would save the world. Today, he’s just “The Man,” just another centi-millionaire who flies around in a private jet and whose business capitalizes fossil fuel companies. Yesterday, Moynihan was figuring out which heads needed lopping off. Today, the climate protesters have decided that he’s next at the guillotine.
In some ways, this turn of events was sadly predictable. In other ways, it was hilariously predictable. The revolution always eats its own. It is the nature of the beast. Moynihan should have known better.
How many others will follow his lead, failing to heed the lessons of history?
