Robert Eccles, a professor at Harvard Business School, and Anson Frericks, co-founder and president at Strive Asset Management, debated the positive and negative impacts of Environmental, Social, and Governance (ESG) Policies on American corporate profits, during the “Has American Capitalism Gone Woke?” debate Oct. 18, sponsored by the Center for Freedom and Western Civilization.
Professor of Political Science Robert Kraynak, who is also co-director of the center, moderated the debate, which focused on whether investment decisions should be made primarily for material reasons to maximize profits for shareholders or if those investment decisions should include other factors pertaining to social policies and values of different kinds, including the impact on the environment, the impact on social justice, and diversity, equity, and inclusion issues.
Kraynak said many ԱƵ students will face these investment decisions in their future careers at businesses or NGOs, regulatory agencies, or even making choices about how to invest for their own retirements. “Knowing ԱƵ students and your future careers, I’m quite sure all of you will be encountering this, and I know some of you have already faced these questions in your summer jobs,” Kraynak says.
Frericks, who founded Strive Asset Management two years ago with current Republican presidential candidate Vivek Ramaswamy and previously led sales and marketing for Anheuser Busch, contends that, when companies are using funds with the intention of impacting social or environmental policies, they are doing so at the cost to shareholders, whose profits should be the primary concern.
“If you’re a believer in free market shareholder capitalism like I am, companies are supposed to act in the best interest of shareholders, that’s their purpose,” Frericks said. “But now there is a progressive environmental social governance agenda that is being placed on them, where now they are supposed to solve issues that are better left to the political process, where every citizen can vote on those issues.
Eccles said he comes at the issue from a left-wing perspective and fundamentally disagrees with Frericks’ premise, noting the concern about “woke capitalism” taking over America is not reflected in the steep gains in the stock market over the past five years.
“Empirically, I don’t see that these effects have happened, but maybe they just haven’t had a chance to play themselves out,” Eccles said. He notes that, of the top five executives in the S&P ranked by pay, 69% are Republican and 31% are Democrats, so the “woke capitalism” takeover Frericks contends is happening in America is taking place under a largely Republican watch.
Eccles said the Republicans have gotten a lot of mileage out of politicizing the issue of ESGs, even though he contends that many in the base don’t understand what it is — but see it as liberal.
“My prediction: I think ESG will remain a topical thing throughout the presidential election, and it’s an important thing to be talking about,” Eccles said. “As a concept, as a useful thing, it’s going to move us forward.”
A full recording of this debate, including a question and answer session with the audience, . For more information on Center for Freedom and Western Civilization events, .
Robert Eccles is a visiting professor of management practice at the Said Business School, University of Oxford. Eccles has been a visiting lecturer at the Massachusetts Institute of Technology and Sloan School of Management, and he was a Berkeley Social Impact Fellow at the Haas School of Business, University of California Berkeley. He was a professor at Harvard Business School and received tenure in 1989. Eccles received an SB in mathematics and an SB in humanities and science from the Massachusetts Institute of Technology and an AM and PhD in sociology from Harvard University. Eccles is an eminent academic advisor to BCG on global ESG integration and reporting. He is also the first chair of KKR’s Sustainability Expert Advisory Council.
Anson Frericks is Strive Asset Management’s co-founder and president. He is an ardent supporter of American free market capitalism and shareholder primacy. Prior to founding Strive, he led finance, sales, and marketing as president of Anheuser-Busch Sales and Distribution Company and began his career in private equity. Frericks received his BA from Yale and his MBA from Harvard.