When ESG knocked at the White House

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What has happened in America this week has surprised and delighted me. Donald Trump’s two advisory committees, staffed from the Chief Executives of big American business have been disbanded, or more properly disbanded themselves. The strategy and policy forum and the manufacturing council are “no more” because of opposition to President Trump’s position on white supremacy.

I hope that nobody reading this blog, thinks that white people are superior to people of other coloured skins or deserving of any greater privileges. While we might concede the historical fact that white people on both sides of the Atlantic had and still have better opportunities, our moral compass is now firmly pointed at equality. For that reason we can delight to see that Ken Frazier, CEO of Merck is a black-skinned man.ken frazier

Today I will be on my boat alongside 12 people , the majority of whom will be of Asian origin. They are as welcome to my boat and to the delights of the Thames as my own family (who have never been to Asia!)

Charlottesville is incomprehensible to me, other than as an historical abstraction. Arguments about the moral code of General Lee, of slavery and of the “rights” of the Klu Klux Klan, have no place in a forward thinking democracy like the UK or the US. And yet these codes , behaviours and values are validated by President Trump, implicitly and explicitly.

This was too much for the great and the good. For all their support of Trump’s business agenda, the executives could not simply laugh Trump’s behaviour off as “politics”.

John Flannery, the new chief executive of General Electric, told staff that the white supremacist march in Charlottesville

“could not be further from the values that we hold dear”.

Jamie Dimon, chairman of JPMorgan, wrote to the bank’s staff:

“It is a leader’s role, in business or government, to bring people together, not tear them apart.”

These leaders did not cite their Environment Social and Governance code, they didn’t have to. But that they had such a code meant that they could not do other than walk away from Trump’s condolence of racism.

Those who have campaigned for the adoption of ethical codes within businesses, can be rightly proud this weekend. For the adoption of the values within those codes has ensured that the president can no longer rely on naked economics but will have to respect capital as a force opposed to lowest common denominator populism.

Trump’s gamble seems a stupid one. Firms like Merck, General Electric and JP Morgan trade throughout the world. While Trump wants to put America first, these organisations have to listen and put their views second. It is hard to see Jamie Dimon talking to European analysts about the importance of ESG , if he was validating the behaviour of a racist bigot.

We will now have to see what the loss of this validation means to Trump’s administration. If corporate America rebels against Charlottesville, will it rebel about the USA’s withdrawal from the Paris Accord? Or the postponement of fiduciary regulations in financial services?

I am reminded of the reign of King Charles I which began with the support of parliament and ended with the King losing his head. Like President Trump, Charles’ legitimacy – which Charles deemed absolute – was questioned, opposed and ultimately brutally terminated because of what we can now see as the causes of the English Civil War. I do not want to see Trump beheaded or even impeached, I want him to govern according to the corporate code that governs corporate America.

Ironically, Trump’s core constituency of support, now looks as politically isolated as economically abandoned. Trump is finding that an attempt to reimpose a world of confederate values simply doesn’t wash in an America that put slavery and white supremacy behind it some time ago. Any thought of recidivism is blocked by the economic reality that corporate America cannot go it alone.

The values of  wider global governance  trump Trump.

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About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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