I have been reading the book Woke, Inc. by Vivek Ramaswamy. It’s not a very good book in my opinion so I will not do a detailed review but it does highlight how corporate profits are being diverted to social causes, good and bad, in the USA. It enables directors of public companies to espouse their favourite causes and signal their virtues while shareholders pay the cost of this munificence.
This largesse is also spreading to the UK. Recently Shell UK announced that “British Cycling has signed a long-term partnership that will bring wide-ranging support and investment from Shell UK as a new Official Partner. The agreement starts this month and runs to the end of 2030. This new partnership will see a shared commitment to; supporting Great Britain’s cyclists and para-cyclists through the sharing of world-class innovation and expertise; accelerating British Cycling’s path to net zero…..”. David Bunch, Shell UK Country Chair, said: “The partnership reflects the shared ambitions of Shell UK and British Cycling to get to net zero in the UK as well as encouraging low and zero-carbon forms of transport such as cycling and electric vehicles”.
Some cyclists promptly accused the company of “greenwashing”, i.e. offsetting their oil/gas pollution by pretending that their profits are going to good causes. But as a shareholder in Shell I object to them redirecting their profits which should go to shareholders to other purposes. Particularly when the clear objective seems to be to reduce consumption of the company’s products.
But companies are now also interfering in politics. So Paypal has been closing the accounts of people and organisations that hold dissident political views. They even closed the account of a UK group that campaigns for free speech. They closed the account without warning, and companies such as Facebook and Twitter have been censoring users who espouse unpopular political views.
The author of the aforementioned book has even launched two ETFs that explicitly aim to pressure companies to drop efforts to diversify their workforces and their focus on climate change according to an article in the FT. That’s contrary to the stance of many institutional investors such as Blackrock. Ramaswamy says: “In reality, companies like Blackrock, and in particular their leaders, are using social causes as a way of assuming their place in a moral pantheon. And in the process, they’re quietly dropping hints to consumers to take the bait and make purchasing decisions on the basis of moral quality rather than product attributes alone…. Woke consumerism is born when woke companies prey on the insecurities and vulnerabilities of their customers…..”.
Ramaswamy argues that capitalism is being corrupted and companies are abusing their public trust.
Businesses have now gone far beyond the promotion of the interests of stakeholders as well as shareholders (reference Section 172 of the Companies Act). Racing cyclists (the main focus of British Cycling) are hardly a stakeholder in Shell.
Yes they are “greenwashing” and they should not be wasting my money on such trivia.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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