Oct 25, 2022 - Economy & Business

Ramaswamy's Strive takes new swipe at ESG priorities

Illustration of a collage of trees, leaves and elements of a hundred dollar bill.

Illustration: Aïda Amer/Axios

The firm led by activist investor Vivek Ramaswamy is launching a new nationwide campaign aimed at getting major corporations to separate growth goals from increasingly polarized cultural issues characterized by environmental, social and governance (ESG).

Driving the news: Starting Tuesday, Strive Asset Management will air digital ads that invoke a spirit of bipartisanship to "promote excellence over ESG priorities" that some view as divisive.

Why it matters: ESG has become a flashpoint between investors and critics who argue the strategy encourages companies to involve themselves in politically-charged, "woke capitalism" that ultimately fails to benefit shareholders.

Zoom out: ESG battle lines have hardened ahead of the midterm elections, where Republicans, many of them critical of the strategy, currently have the edge in public polls.

  • According to Strive, companies like ExxonMobil, Chevron, Home Depot, Amazon and Citigroup have "untapped potential" that could be unleashed if they weren’t subject to ESG constraints.

What they're saying: "Everyday Americans have extraordinary yet unrealized power at their fingertips," Ramaswamy, who serves as executive chairman of Strive, said in a statement.

  • "They don’t just vote as citizens at the polls in two weeks. They vote every day with their investment dollars — which are too often used by other asset managers to inject political agendas into corporate America's boardrooms."

Yes but: It's not just Ramaswamy who thinks ESG could be less politically charged and more profit-oriented. At least one firm, ENV Ratings, aims to use quantitative metrics to make environmentally friendly investments less politically charged, and more objective.

  • "ESG is a co-mingling of environmental, social and governance factors," Marcos Carrington, CEO of ENV Ratings, tells Axios in an email.
  • "Isolating environmental ... from social and governance ... allows companies and investors to measure and track an objective indicator for focused investment."
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