Sep 14, 2022 - Economy & Business
Twitter whistleblower testimony reclaims ESG
Twitter whistleblower Peiter "Mudge" Zatko yesterday told a Senate committee that the social media company had put financial considerations ahead of user security.
- The assembled senators were shocked. And dismayed. And appalled.
- This included members of a Republican Party that's wielding opposition to corporate ESG (aka "woke capitalism") as an electoral messaging strategy, filtering down to state investment bans that could soon impact private equity.
Why it matters: Two-thirds of the ESG acronym refer to the very things that Zatko alleged.
- Social responsibility: Twitter put profits over people.
- Governance: Twitter's board was not properly informed about what was happening, and there were other communications breakdowns.
The big picture: The anti-ESG movement is primarily about protecting legacy fossil fuel interests, under the guise of protecting investors.
- It intentionally flies in the face of Corporate America's relatively new mantra about how driving shareholder value is no longer its sole business goal; that there are other legitimate stakeholders, including customers, employees and communities.
- As yesterday's hearing showed, elected Republicans don't really object to most core ESG tenants. In fact, they find the "S" and the "G" to be super duper important, in spite of their own political rhetoric.
The bottom line: There's a compelling argument that the "E" (environment) comes first for a reason, given that unfettered carbon emissions could prove globally catastrophic (thus rendering irrelevant most corporate social or governance advances).
- At the same time, however, there's value in not always emphasizing one letter at the expense of the other two, whether you're running a company like Twitter or running for Congress.