Student Opinion: Businesses should focus on profits, not politics

On Friday, March 3, the Conservative Political Action Conference held a panel discussing ESG, which stands for environmental, social and governance, the non-financial factors now being considered in the decisions of large investment firms when buying stock in companies. Titled “The New Axis of Evil: Soros, Schwab, and Fink,” the panel consisted of Sean Spicer, former White House press secretary, Andrew Puzder, former chief executive officer of CKE restaurants and Charles McCall, speaker of the Oklahoma House of Representatives.

Rooted in the shareholders of a company rather than the employees, ESG investing is an approach to investing that takes into account a company’s compliance to environmentally sustainable standards. Shareholders don’t invest in a company based on performance but rather its adherence to leftist ideals. Large investment firms like BlackRock often make up the top shareholders of large companies and enforce the principles of ESG.

For example, Puzder described how the shareholders of ExxonMobil elected three environmentalists to the board, and in the next few months, the company had a net zero carbon emissions policy. Obviously, this policy is not in the interest of either the oil and gas company or its customers. Rather, the policy is only in the interest of a few powerful shareholders.

However, using ESG standards to decide whether or not to invest in a company, or even to support the company as a customer, is ridiculous. A business’s primary goal should not be political, whether that involves implementing leftist ESG principles or favoring politically motivated subsidies. A business’s purpose is to deliver quality goods and services to its customers to make a profit. That’s it. 

“You do start to see the widening out there now, where some companies are going left and some companies are going right,” Puzder said. “The ideal world would be a Milton Friedman kind of world, where everybody focused on making profits and generating returns for investors. … It’s that emphasis on this environmental, social and governance investment criteria that’s really had a terrible effect on our economy.”

Therein lies the issue. Businesses exist solely for the transaction of commerce between the producer and consumer. And contrary to popular belief, this is a good thing. There is nothing selfish with wanting to profit.

Even in the Bible, profit is seen as good. In Luke 19, Jesus tells his disciples the parable of the nobleman who gave each of his servants the same amount of money before he leaves on a trip, saying, “Do business until I return” (Luke 19:13). When he returns, the nobleman rewards those who multiplied the money and made a profit, and he punishes the servant that made nothing out of his pound.

The parable is symbolic of taking the salvation and spiritual resources God has given you to go and make disciples of others. However, for the parable to make any sense, making a profit must be seen as a good thing, so that those hearing the parable would assume that making a profit symbolizes making disciples.

Regarding businesses acting socially responsible: if customers have a problem with how a company is operating, they can take their money elsewhere. In the panel, Puzder advised contacting a business and letting it know why you’re no longer a customer. If a business starts losing customers, and therefore money, and if they can link it to a specific action, they’re much more likely to take appropriate measures.

It all comes back to making a profit. Eleven times out of ten, businesses and investors should look towards what’s making them a profit and what isn’t when making decisions. They shouldn’t put ESG principles or politics before profit. After all, looking to profit helps a business do what’s best, and in turn, provides the best goods and service to the customer.

Ava Bear is the Feature Editor at the Liberty Champion.

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