Peter Thiel’s New Venture Aims to Lure Companies Away From Environmental Justice Activism

By Michael Washburn, June 30, 2022

As the Walt Disney Co., Coca-Cola, Google, Microsoft, the Atlanta Falcons, and other high-profile corporate entities involve themselves in public controversies over hot-button social topics and pursue market strategies and internal policies based on Environment, Social, and Governance (ESG) and Diversity and Inclusion (D&I) principles, some asset managers increasingly wonder how to invest capital in a way that won’t compromise their fiduciary duty to shareholders who are seeking the highest possible returns.

The trend of “woke” corporate governance is so pervasive and its divisiveness and effects on the bottom line are so hard to ignore that two ambitious entrepreneurs, Vivek Ramaswamy and Anson Frericks, co-founded a new investment firm, Strive Asset Management, in May.

Backed by venture capitalist Peter Thiel and Bill Ackman, founder and CEO of PershingSquare Capital, Strive’s role is to foster and support corporations operating free from ESGand D&I imperatives and in accordance with more traditional criteria—or as the financial firm’s website reads, “Our mission is to restore the voices of everyday citizens in theAmerican economy by leading companies to focus on excellence over politics.”

In the view of Strive’s founders, the need for an asset management firm pushing an alternative to woke ESG and D&I-based strategies and governance has been particularly acute, as what have long been familiar, indeed iconic, names in the corporate universe have pushed a socially conscious stance that has alienated consumers who never thought twice about spending money on those brands in the past.

Activist CEOs

BlackRock’s CEO Larry Fink is on record as having issued warnings that BlackRock will vote against directors of companies not deemed to have made sufficient progress in the implementation of environmentally conscious and sustainable policies and practices, and in the reporting of such practices.

The heads of prominent corporations have heeded the call from activist investors and taken bold public stances to signal their virtue. Coca-Cola CEO James Quincey has joined the heads of other firms in publicly denouncing the state of Georgia’s new and stricter voting requirements and policies. In April, Disney took a public stand against Florida’s law barring the instruction of young pupils in kindergarten through third grade in topics relating to gender identity, derided by critics as its “Don’t Say Gay” bill.

In response to Disney’s stance, Florida Gov. Ron DeSantis moved to revoke the corporation’s long-held status as a self-governing entity under Florida law with its own infrastructure and emergency services, among other perquisites.

These are the types of self-serving public stances that may help the CEOs look progressive and “with-it” in 2022, but undermine the corporations’ purpose of bringing Americans together behind iconic brands and maximizing value for shareholders, Strive’s founders believe.

The ESG and D&I approach isn’t without its defenders. Ultimately, such stances aren’t at odds with profitability in an environment where the market acts as the final judge of howCEOs conduct themselves, said Lisa Vioni, CEO of Hedge Connection, a marketing platform for asset managers established in 2005.

“I think that over time, the market tells us whether a decision by a company is a good or abad one. Institutional investors will do their research, whether on Disney or any other company that has decided to make a change based on an ESG principle and then make an investment decision. If the market thinks that the change is a bad idea, it will be reflected in the price of that company’s stock,” Vioni told The Epoch Times.

Read the full article from The Epoch Times here.