The ESG Game: A Strategy for the Planet or the Powerful?

This is not a hate post. It is not a rejection of sustainability, responsible governance, or ethical investing. Those principles hold intrinsic value and should be part of any serious corporate strategy. However, this is also a moment of realization—a chance to step back and reassess whether ESG is truly serving the broader public good or whether it has evolved into a system that primarily benefits those who control it.

For years, ESG has been framed as a necessary shift in business, a way to align profit with purpose. The promise was that companies adopting ESG would be rewarded, investors would see strong returns, and society would benefit from more ethical corporate behavior. But who actually profits from this system? Is it the environment? The small enterprises struggling with compliance costs? The everyday investor looking for financial security? Or is ESG a financial instrument that benefits a select group—those who dictate the rules, control the ratings, and decide which companies succeed or fail based on ever-shifting criteria?

This is not a conversation about whether companies should operate responsibly. That is a given. This is about whether ESG, as structured today, is truly about sustainability or whether it has become a mechanism for financial leverage and control.

Let us examine the evidence.

Who Profits from ESG? Follow the Money

BlackRock

No entity has benefited more from ESG than BlackRock, the world’s largest asset manager. Under CEO Larry Fink, BlackRock has pushed ESG as a central investment strategy, encouraging companies to align their operations with sustainability goals. While the public narrative has been about ethics and responsibility, the financial reality is far more revealing.

• ESG funds made up only 11% of BlackRock’s total assets at one point, yet they captured 37% of all new fund inflows.
• These inflows translate directly to higher management fees, generating billions in additional revenue.
• By embedding ESG into investment criteria, BlackRock has positioned itself not just as a financial player but as an unofficial regulator, exerting influence over corporate policies and strategic decisions.

Fink has since tempered his public stance, stating that ESG has been “weaponized” in political debates. However, the infrastructure of ESG investing remains firmly in place, continuing to drive financial gains for those at the top while subtly shaping corporate governance worldwide.

Vanguard and State Street

BlackRock is not alone in leveraging ESG as a strategic asset. Vanguard and State Street, the other two members of the “Big Three” asset management firms, have taken similar approaches.

• Both firms have launched ESG-focused index funds and ETFs, accumulating billions in additional assets from investors eager to align with sustainability narratives.
• State Street has used ESG to assert shareholder influence, as seen in its highly publicized "Fearless Girl" campaign, which called for gender diversity on corporate boards. While the message resonated with many, it also reinforced State Street’s ability to shape corporate governance standards.
• ESG commitments have given these firms a competitive advantage, allowing them to attract institutional investors who prioritize ESG compliance, further increasing management fees.

At its core, this is not about philanthropy. It is about business.

Large asset managers have built a profit-driven ESG ecosystem, where sustainability rhetoric serves as both a marketing tool and an instrument of influence.

The ESG Ratings Industry: Who Decides What "Good" ESG Looks Like?

For ESG to function, companies need a system of measurement—a way to determine which firms align with sustainability principles. This has led to the rise of ESG ratings agencies, compliance services, and consulting firms, which have turned ESG into an industry of its own.

• MSCI, S&P Global, and Moody’s have developed ESG scoring models, but these ratings are often inconsistent and subjective, with companies receiving vastly different scores depending on the agency evaluating them.
• ESG scores are now directly tied to capital allocation, meaning a low rating can impact a company’s ability to attract investment.
• Financial institutions such as Bank of America profit from ESG-linked financial products, such as green bonds and sustainability-linked loans, effectively turning ESG compliance into a revenue stream.

This creates a significant challenge for businesses, particularly smaller firms that may lack the resources to navigate ESG compliance. Instead of encouraging real, meaningful change, ESG ratings can become an expensive bureaucratic process, where compliance is more about checking the right boxes than delivering genuine sustainability outcomes.

When sustainability becomes a product rather than a principle, the focus shifts from real-world impact to financial engineering.

Corporate Leaders: The Personal Benefits of ESG Compliance

Al Gore: ESG’s Most Successful Investor

One of the most prominent advocates of ESG investing has been former U.S. Vice President Al Gore, but his role in this space extends far beyond activism.

• In 2004, Gore co-founded Generation Investment Management, a firm that now manages over $30 billion in assets, focusing on sustainability-driven investments.
• Even at a 1% management fee, this generates over $320 million annually, with Gore’s own earnings estimated to be near $100 million per year.
• His firm selectively invests in companies with high ESG scores, reinforcing the structure where capital is funneled toward ESG-compliant firms while others are left behind.

This is not to diminish the importance of sustainable investing. But it does highlight a clear financial reality—ESG is not merely an ideology; it is a highly profitable business model for those who understand how to leverage it.

The Role of Government: ESG as a Policy Tool

ESG is not only a financial instrument—it has also been integrated into regulatory and policy frameworks, shaping how businesses operate on a global scale.

• CalPERS, one of the largest public pension funds ($500+ billion AUM), integrates ESG into investment decisions, pressuring companies to align with ESG criteria to remain eligible for institutional capital.
• The European Union has established ESG disclosure mandates, effectively guiding private capital into government-approved sustainability initiatives.
• The SEC has proposed climate-risk disclosure rules, increasing compliance burdens while creating more demand for ESG-related auditing, consulting, and legal services.

The concern is not that ESG is influencing corporate policy. The concern is whether this influence is being used to promote genuine sustainability or whether it is serving as a mechanism to consolidate financial and regulatory control.

When ESG shifts from voluntary commitment to de facto requirement, it becomes less about market-driven responsibility and more about compliance with a predefined financial structure.

The Bigger Picture: ESG as a System of Influence

Let us take a step back. Is ESG still about sustainability, or has it become a system that rewards those who control the ratings, direct investment flows, and dictate corporate behavior?

Here is what we know:

• The largest financial institutions are the biggest beneficiaries of ESG.
• ESG ratings are neither objective nor uniform—they are a business model.
• Corporate leaders who align with ESG gain both financial and reputational advantages.
• Governments and regulatory bodies are using ESG as a mechanism to direct capital and corporate policy.

This is not about rejecting ESG outright. It is about recognizing that the way ESG is currently structured benefits those who set the rules more than it benefits the broader economy, the environment, or the average investor.

The fundamental question remains: who is shaping the future of business—and who stands to gain the most from that control?

It is time for investors, businesses, and policymakers to rethink ESG—not as a moral absolute, but as a financial and regulatory system that must be analyzed, questioned, and held accountable.