It’s official: The emperor has no clothes. The much-touted ESG (Environmental, Social, Governance) investment scores have been unmasked for what they truly are: a well-disguised game of manipulation.

Yesterday, Aaron Sibarium of the Washington Free Beacon reported on how Tesla, a leading manufacturer of electric vehicles, received a lower ESG (Environmental, Social, Governance) score than Philip Morris International, one of the world’s largest producers of a product that kills millions every year: cigarettes. How could this possibly be the case? The answer lies in how corporations’ ESG scores are evaluated.

In the race for ESG points, the socio-political narrative of diversity and inclusion often overshadows the more serious environmental impact and public-health issues. Corporations, even tobacco giants that progressives have historically despised, have learned to emphasize the diversity of their boards, their involvement in social-justice initiatives, and the funding of minority businesses, thereby exploiting the “S” in ESG to their advantage. Tesla, by contrast, has received comparatively lower ESG ratings, ostensibly due to its perceived lack of diversity and social initiatives and its anti-woke CEO, Elon Musk, even though its main product — electric vehicles — represents a significant step toward a more sustainable future.

The truth is that ESG ratings aren’t actually about assessing a business’s environmental, social, and governance impacts. They are an arena where companies compete for points by checking off a list of ever-changing, ideologically loaded criteria. 

Instead of holding corporations accountable for their environmental and social impact, the ESG system enables companies to paint a false image of ethical behavior and social responsibility. And as the influence of ESG ratings on investment decisions increases, so does this potential for deception. Perhaps it’s time to ditch ESG altogether?