Basically, being woke means obsessing about race, gender, and sexual orientation. Maybe climate change too. That’s the best definition I can give.
If you say so. Dismissing climate change as just another activist obsession speaks to the logical disconnect of exhorting Exxon to focus on delivering a high-quality product without acknowledging that said product carries an inherent, climate-related flaw that requires a strategic response. One person’s liberal hobby horse is another’s systemic risk.
The blurring of lines between ESG, SRI and all the rest of it has done a disservice to sustainable investing, in part by creating space for blanket dismissal. As my colleague Nir Kaissar has written, some of the blame for this lies with seeming champions such as Fink himself, who mixes calls for companies to adopt pragmatic ESG risk management with very different SRI proposals to exit investments in sectors deemed unsustainable. This sows confusion and invites derision.
In that sense, Strive’s broadside offers a useful wake-up call for ESG to hone its messaging and methodology. ESG’s great strength is its use of objective criteria rather than subjective beliefs to reduce financial risk or enhance financial performance. It also allows for more nuance; one could, for example, invest ESG-style in a coal-heavy utility today in order to help along (and benefit from) its future renewables projects.
The fuzziness of the investment movement that anti-woke asset management sets itself against is a doubled-edged sword. Most passive investors prize the low costs that come with scale, and “excellence capitalism” seems too vague a pitch to disrupt that. Nevertheless, Strive’s timing is impeccable, effectively taking the opposite side of what has become a crowded trade.
That timing also makes it suspect. Strive launches amid a gathering Republican campaign against companies taking positions that oppose the party line on wedge issues. The day after Strive’s announcement, former Vice President Mike Pence gave a speech in Texas attacking ESG and socially minded investing, making a wild claim that Exxon’s new directors were “now working to undermine the company from the inside.” As much as Strive touts itself as “depoliticizing corporate America,” I’m afraid you don’t get to do that credibly while also boasting about seed money from Thiel.
Liam Denning is a Bloomberg Opinion columnist covering energy and commodities. A former investment banker, he was editor of the Wall Street Journal’s Heard on the Street column and a reporter for the Financial Times’s Lex column.