Citing concerns over climate change and the “golden opportunity” for societal change created by the COVID-19 pandemic, the World Economic Forum launched in June 2020 a radical “Great Reset” initiative, in partnership with various leaders from the public and private sectors.
CEOs of major corporations, as well as banks, central banks, financial institutions, labor unions, international organizations, and government leaders — including John Kerry, the Biden administration’s “climate czar” — quickly signed on to the plan, which pledges to push the “reset” button on the global economy.
As World Economic Forum head Klaus Schwab wrote in an op-ed about the Great Reset published in June, “The world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a ‘Great Reset’ of capitalism.”
Supporters of the Great Reset aim to alter the global economy through two different reform strategies. The first is to create a variety of new government programs, including policies similar to the far-left Green New Deal resolution proposed in 2019 by New York Congresswoman Alexandria Ocasio-Cortez and Vermont Sen. Bernie Sanders.
The second, even more far-reaching part of the Great Reset is the widespread adoption of environmental, social, and governance (ESG) standards, which change the way businesses are evaluated.
Under an ESG model, companies are not only rated using traditional metrics, such as revenues and the quality of goods and services offered, but also on a variety of social justice metrics, such as their carbon footprint, air quality of a business’ supply chain, and having the “right” ratio of Asians to Hispanics working in the company, among many other factors.
Thousands of companies have already adopted ESG standards around the world, including an estimated 82% of large companies in the United States, and to this point, they have done so voluntarily.
There are a number of reasons why the Great Reset has caught on among the heads of the largest corporations in the United States and many of the planet’s wealthiest financial institutions, not least of which is that there is a great deal of money invested in the ESG movement. The highly influential Principles for Responsible Investment group claims investors controlling more than $100 trillion in wealth have already agreed to funnel immense amounts of cash into businesses that support ESG systems.
But supporters of the cause have also routinely suggested that voluntary ESG standards could soon become government mandates, and thus, smart businesses are better off getting on government’s good side now, before the regulatory hammer drops.
It appears that those warnings could soon become a reality in Europe. On March 10, the European Parliament voted in favor of a resolution that demands all large companies in the European Union, as well as some smaller businesses, put ESG standards in place, or else face harsh penalties from their respective national governments.
Although the resolution passed by the European Parliament is not yet binding on EU member states, it is strong sign that it is likely to occur. In order for the resolution to become binding, the European Commission must first formally propose the resolution as legislation, and then the Parliament and member states must vote in favor of the legislation. This is a move that seems highly likely to occur, due to the overwhelming support for the resolution in the EU Parliament. The commission is expected to provide official legislation as early as June 2021.
According to international law firm Shearman and Sterling, the “proposed due diligence framework targets three categories of ‘potential and/or actual adverse impacts,'” including “human rights,” the environment, and “good governance.”
These categories are deliberately broad and would in many cases require businesses to make sweeping reforms to align with left-wing goals, imposing them on the societies in which they operate. For example, the “human rights” category “means any potential or actual adverse impact that may impair the full enjoyment of human rights by individuals or groups of individuals in relation to human rights, including social, worker and trade union rights.”
Protecting the environment would involve, according to Shearman and Sterling, “the right to a safe, clean, healthy, sustainable and biodiverse environment” as defined by “internationally recognized and EU environmental standards.”
Further, the resolution demands that business “strategies should be aligned with … the European Green Deal, and the commitment to reduce greenhouse gas emissions by at least 55% by 2030, and Union international policy, especially the Convention on Biological Diversity and the Paris Agreement,” among other standards.
Perhaps most importantly for Americans and U.S. businesses, the Parliament’s resolution calls for these ESG requirements to cover all of a business’ activities, including its “value chain.”
The “value chain” is defined in the resolution as “all activities, operations, business relationships and investment chains of an undertaking and includes entities with which the undertaking has a direct or indirect business relationship, upstream and downstream, and which either: (a) supply products, parts of products or services that contribute to the undertaking’s own products or services, or (b) receive products or services from the undertaking.”
Or, put more simply, if an American company wants to do business in the European Union or with any of the European Union’s large businesses, it will also have to have ESG standards of its own, or it will at least be contractually obligated to adopt policies in line with European ESG mandates.
The Shearman and Sterling law firm confirms this interpretation of the resolution in its report, in which it wrote, “A company therefore will have to make all efforts within its means to ensure that its business partners (both direct and indirect, and upstream and downstream) have in place human rights, environmental and good governance policies that are in line with the company’s obligation of due diligence.”
The Great Reset is about to become the law of the land throughout most of Europe, and it is highly likely that if the European Commission passes legislation comparable to the resolution already approved by Parliament, it will, in effect, become the law for many of the largest corporations in the United States — a spectacularly disastrous development that will impose left-wing ideological changes to society on all Americans, whether they want them or not.