A 2017 study published in Business and Politics which comprehensively mapped the ownership in the US of the “Big Three” – BlackRock Vanguard and State Street – found that together they constituted the largest shareholder in 88 per cent of the S&P 500 firms. “Through an analysis of proxy vote records, we find that the Big Three do utilise coordinated voting strategies and hence follow a centralised corporate governance strategy,” the researchers said.
The S&P 500 is a stock market index that tracks the stock performance of 500 of the largest companies listed on stock exchanges in the United States. As the Big Three hold 88 per cent of the stocks listed, it would be logical that S&P is merely following the lead of the Big Three’s strategies. So, what is the strategy?
How BlackRock – the world’s largest asset manager frames its investment approach is a leading indicator. In March, BlackRock published its 2023 BlackRock Investment Stewardship report. There was no mention of “ESG” because according to Larry Fink, the term had been weaponised against them. So instead, BlackRock is focussing on “sustainable,” “climate-related risks” and “ greenhouse gas emissions.”
ESG and Social Credit Scoring System
The concept of ESG scores and the “sustainability” concept was introduced by the United Nations in 2006 with the publication ‘Principles for Responsible Investing’, which advocated investments that included ESG concepts. According to many critics, ESG is a social credit scoring system that is changing how businesses are measured by banking systems, investors, and government institutions. It is the beginning of a Chinese-style social credit system.
China’s social credit system is a combination of government-sponsored surveillance of people, businesses and government agencies through their social interactions. It is a credit rating system that assigns a trustworthiness score to its citizens and businesses, who could then be blacklisted or whitelisted based on the score itself.
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