As Trump Takes The Wheel, Big Corporations Extricate From DEI, Climate Programs

Authored by Kevin Stocklin via The Epoch Times (emphasis ours),

After years of applying the progressive environmental, social, and governance (ESG) ideological framework to their corporations, executives appear to now be realizing that these programs could be driving their companies into a legal and financial wall.

Illustration by The Epoch Times, Freepik

The past year has seen a growing list of Fortune 500 companies announcing that they are dropping race- and gender-based programs for their employees and pulling out of global net zero climate clubs.

Companies that have announced they are canceling or dialing back their diversity, equity, and inclusion (DEI) programs include Meta, Walmart, Ford, McDonald’s, Harley-Davidson, John Deere, Tractor Supply Company, Lowe’s, Molson Coors, Nissan, Toyota, and Stanley Black & Decker.

In addition, within weeks of the 2024 election, six of the largest U.S. banks—Goldman Sachs, Citigroup, Wells Fargo, JPMorgan Chase, Bank of America, and Morgan Stanley—dropped out of the U.N.-sponsored Net-Zero Banking Alliance.

On Jan. 13, the Net Zero Asset Managers initiative (NZAMi) announced that it would suspend its activities after investor giant BlackRock announced its withdrawal from the club on Jan. 9. These departures followed in the wake of half of the members of the Net-Zero Insurance Alliance quitting that organization in 2023.

This has led many to conclude that the ESG movement is rapidly coming to an end.

“ESG and DEI are both on death watch,” Daniel Cameron, former Kentucky attorney general and current CEO of the nonprofit 1792 Exchange, told The Epoch Times.

“I think it’s because companies are realizing that a lot of the country just want our corporate community to focus on creating and developing great products and providing great service, rather than pushing or preaching a partisan agenda,” he said.

Republican victories in the November 2024 elections will likely spark more defections from the progressive corporate movement.

“The election of Donald Trump put backers of ESG on notice, and I believe the recent departure by several major banks and asset managers from the U.N.’s anti-fossil fuel cartel confirms that the broader ESG movement is on life-support,” Rep. Riley Moore (R-W.Va.) told The Epoch Times.

Rep. Riley Moore (R-W.Va.) (C) speaks during a press conference at the U.S. Capitol on Jan. 14, 2025. Samuel Corum/Getty Images

In his former role as state treasurer of West Virginia, Moore was among the first to divest state funds from BlackRock over what he charged was the firm’s support for ESG policies.

The Nasdaq Stock Market on Jan. 16 filed a request with the Securities and Exchange Commission (SEC), seeking to withdraw its 2021 diversity rule after an appeals court recently struck it down.

The Nasdaq rule had required companies listed on the exchange to have at least two “diverse” board members, including “at least one director who self-identifies as a female” and one who “self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities, or as LGBTQ+.”

Is ESG Good for Companies?

The ESG ideology originated at the United Nations in 2004 as a way to get private companies on board with progressive climate and social goals known as the U.N.’s “Sustainable Development Goals.”

ESG, together with its DEI component, were hailed by advocates as essential risk-management tools that were not only good for society, but also good for companies’ bottom lines.

Testifying before the Texas state senate in 2022, Dalia Blass, BlackRock’s head of external affairs, stated that the company believed that “an orderly transition to a low carbon economy is much more beneficial for … clients’ portfolios.”

However, at the same hearing, Lori Heinel, chief investment officer for State Street Global Advisors, said, “I have no evidence that this is good for returns in any time frame; in fact, we’ve seen the evidence to be quite contrary.”

Ernst & Young, a global management consultancy, has argued that “managing ESG risks has become a compulsory exercise,” and its 2023 C-suite Insights Survey reported that 90 percent of companies had ESG programs in place, with corporate boards and chief sustainability officers directing and monitoring their progress.

A 2022 survey by the Harvard Business Review found that two-thirds of U.S. companies had a race- or gender-based DEI program in place. Companies including Wells Fargo, JPMorgan Chase, Delta Airlines, Ralph Lauren, and Estee Lauder implemented race-based hiring and promotion policies, and United Airlines announced in 2021 that half of its new pilot trainees would be women or “people of color.”

McKinsey & Company, a management consultancy, stated in 2023 that companies that employed more women or were more racially diverse were “significantly more likely to financially outperform.” However, a subsequent analysis of the performance of companies in the S&P 500 index, published in 2024 by Econ Journal Watch, found no statistically significant relationship between companies’ racial diversity and their sales, profits, or equity performance.

A sign for U.S.-based McKinsey & Company management consulting firm in Geneva on April 12, 2022. Fabrice Coffrini/AFP via Getty Images

That latter report, written by accounting professors Jeremiah Green at Texas A&M University and John Hand at the University of North Carolina, stated that McKinsey’s methodology was “erroneous [and] should not be relied on to support the view that U.S. publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.”

According to many critics, ESG and DEI were never much more than a corporate fad, which has now fallen out of fashion.

“There never were as many true believers as people think—it was always more virtue-signaling and grift than anything else,” David Bahnsen, founder and chief investment officer of The Bahnsen Group, told The Epoch Times. “But there will remain some true believers, albeit a marginalized sect of the investment landscape.”

From a Movement to an Industry

This is a dramatic decline for a movement that morphed into an industry, and which only a few years ago dominated the corporate landscape. The ESG juggernaut included asset managers, consultants, rating agencies, accountants, proxy agents who advised shareholders and pension fund managers about how to vote on corporate ballots, and numerous climate clubs to coordinate efforts.

The industry was backed by billions of dollars from Wall Street, as well as state and national pension and investment funds. ESG-driven investment dollars surpassed $30 billion in 2024, according to Bloomberg Intelligence reports, and investment bank Morgan Stanley reported that “sustainability” funds comprised about 8 percent of all assets under management worldwide by 2023.

But even this was only the tip of the iceberg.

The world’s savings and investments are heavily concentrated in the hands of just a few fund managers, the largest of which, called the “Big Three,” are BlackRock, State Street, and Vanguard, which collectively manage more than $20 trillion in assets largely through their index funds.

By comparison, the United States’ GDP is approximately $29 trillion.

A 2022 study by Lucian A. Bebchuk of Harvard Law School and Scott Hirst of Boston University found that “the Big Three collectively held a median stake of 21.9 percent in S&P 500 companies, which represented a proportion of 24.9 percent of the votes cast at the annual meetings of those companies.”

A man walks into the BlackRock offices in New York City on Jan. 16, 2014. Andrew Burton/Getty Images

Added to this are the United States’ largest municipal retirement funds, including CalPERS, CalSTRS, and New York City and state pension funds, which have also pressured companies to embrace ESG ideology.

These fund managers joined U.N.-sponsored net zero alliances, such as NZAMi and the Net-Zero Banking Alliance—which pledged to reduce the use of fossil fuels—as well as other activist organizations such as Climate Action 100+.

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