Business
ESG, DEI, and the Rise of Fake Reporting

From the Brownstone Institute
By Paul Frijters, Gigi Foster and Michael Baker
We know that the modern West has developed a jaw-dropping degree of totalitarianism, wherein the bureaucracies of the state and the corporate sector coordinate together to cripple humans outside their power networks and media channels. But what are the mechanics of this coordination? To understand one of the games they play, consider the rise of measures and standards associated with DEI (Diversity, Equity, and Inclusion) and ESG (Environmental, Social, and Governance) – both occupants of a highly abstract thought dimension and the latter an especially incomprehensible word salad.
ESG as a phrase was coined in a 2006 United Nations report, gradually gaining adoption by private companies like BlackRock via the production of annual ESG reports. Governments then started supporting these voluntary efforts, and eventually began making them mandatory. Since early 2023, corporations in the EU have been compelled to report on ESG. Many US companies with subsidiaries in the EU must observe both US and European rules, and those in the Asia-Pacific region too are starting to follow the ESG reporting pantomime.
In brief, ESG originated at the level of the international and intellectual stratosphere and then grew, unchecked by tedious real-world constraints like scarcity and tradeoffs, as a kind of malignant joint venture between large government bureaucracies and large corporations.
This JV is a serious industry, offering lucrative money-making opportunities for consulting companies, fund managers, and assorted professionals who ‘help’ companies comply. Bahar Gidwani, co-founder of a company called CSRHub, a compiler and provider of ESG company ratings, estimates that the collection of ESG data alone is already costing companies $20 billion worldwide.
It is an expanding industry too, since the reporting requirements keep increasing: according to recent reports, the head of the US Securities and Exchange Commission estimates that the cost of ESG reporting by the companies it oversees could quadruple to $8.4 billion this year, primarily due to the introduction of more ESG requirements. And that’s just in the US.
Large reporting costs are easier for large companies to bear, which offers a clue to why they’re interested: this sort of burden, particularly when made compulsory by the state, helps them dominate their smaller competitors.
DEI is the younger brother of ESG. At present, DEI reporting is not yet compulsory, but about 16% of the biggest US firms have open DEI reports, and the DEI fad is growing, perhaps eventually to eclipse ESG. Just as with ESG, DEI originates from the grandiose world of fluffy abstractions, big corporations, and governments. Despite efforts to make it appear otherwise, it is not grassroots at all.
The Benign-Sounding Aims of ESG
ESG measures and reports are supposedly about gauging whether the activities of corporations are ‘sustainable,’ and especially whether companies are reducing their carbon footprints. DEI is about whether a company’s employment practices promote gender and race ‘equality,’ provide ‘safe spaces,’ and rely on global supply chains that adhere to ‘fair’ practices. Most reasonable people would agree that many of these stated goals sound worthwhile in principle. What is being advocated sounds caring and does not, on the face of it, appear to be destructive in any way.
Yet, talk is always cheap. How do these pretty ideas get operationalized when they confront the harsh reality of measurement? Let us delve into a leading example from a company report.
Grab Holdings from Singapore
Many Asian companies are ensnared in the ESG compliance system because they are listed on Western financial exchanges. One such company is the Singapore-based ‘superapp’ Grab Holdings, listed on the Nasdaq. Its customers mainly interact with Grab Holdings via a mobile phone app, where they can buy many different services (food delivery, e-commerce, ride-hailing, financial services, etc.), hence the term ‘superapp.’
Grab is unprofitable but very visible. For the first half of 2023, it lost $398 million, on top of the $1.74 billion it lost in 2022. However, it operates in businesses — particularly food delivery and ride-hailing — with serious environmental and human impacts across a vast region encompassing 400 cities and towns in eight Southeast Asian countries. To anyone living where Grab operates, its fast-moving, green-helmeted motorcycle riders are as familiar as yellow taxis are to New Yorkers or red double-decker buses are to Londoners.
Grab’s business model is inherently not great for the safety of its drivers and the public. Grab uses routing and other technology to match riders with deliveries and to minimize both wait time for drivers and delivery times to customers. Scheduling is highly efficient because of the technology, which is to say that drivers are on tight schedules with razor-thin commissions.
To make a buck, the drivers for Grab (and its competitors) have to be brave and aggressive on the road. Some are real daredevils – the Evel Knievels of Southeast Asia – as we have personally witnessed. Not only that, but there is stiff competition in each of the markets in which Grab operates. Grab itself says that 72% of its five million drivers do double duty, performing both food deliveries and ride-hailing services. This makes the company a more efficient service provider across both cut-throat businesses and gives drivers the opportunity to earn more money.
Despite the fact that it doesn’t make a profit — at least not yet — Grab splashed out to produce an ESG report that in its last iteration (2022) was 74 pages long and almost as heroic as its drivers.
The introductory pages are taken up with the usual marketing talk, replete with large photos of company motorbike drivers grinning from ear to ear because, well, they are just so grateful to be part of such a great organization. The uniforms in the photos are smart and clean, in contrast to the reality which is that the drivers’ green uniforms are almost always greasy and grubby and the drivers often look, understandably, stressed and morose.
Deeper into the ESG report, Grab gives us 5 pages on how admirably it is performing regarding road safety, 8 pages on greenhouse gas emissions, 1 on air quality, 4 on food packaging waste and 8 on inclusiveness.
Pantomime One: Road Safety
The part of the report on road safety is of special interest, since Southeast Asia’s roads have a deservedly deadly reputation for motorcyclists, and much of the mayhem is provided by the delivery drivers themselves. For example, one study in Malaysia reported that 70% of food delivery motorcyclists drivers broke traffic rules during delivery, and the kinds of violations covered the waterfront: illegal stopping, running red lights, talking on the phone while riding, riding in the wrong direction, and making illegal U-turns. The statistics on crashes involving these drivers make for grim reading.
Other studies based on rider surveys tell an even grimmer story. A 2021 survey of food delivery drivers in Thailand found that 66% of the more than 1,000 respondents had been in one to four accidents while working, with 28% reporting more than five. This squares with reputation: in countries like Thailand, where enforcement of traffic laws is the exception rather than rule, dangerous driving by two-wheelers is famously awful.
So it is with some surprise that one reads in Grab’s ESG report that there is only just under one accident for every million rides involving a Grab delivery driver. That is an incidence at least one hundred times lower than the incidence implied in self-reports. One may assume that many accidents involving delivery drivers are not reported to the company, particularly those involving no or minor injuries, or where the driver is concerned that he will lose his job.
This latter concern is not trivial, since Grab claims that it has a zero-tolerance policy toward violators of the company’s Code of Conduct, which includes failure to follow road rules. This means the count of accidents per ride is a shaky number at best. The report doesn’t really say where the company gets this number from, so it could well be made up out of thin air, though presumably whoever wrote it down had some rationale in mind. One might imagine something like “Sounds low, and dumb Westerners will believe it.”
Pantomime Two: Grab’s Strategy for Saving the Planet
After dispensing with the road safety issue, Grab’s ESG report moves on to how the company is saving the planet. The company’s greenhouse gas emissions rose during the course of the year because of ‘normalization’ after covid, but the report’s author disingenuously sidesteps the problem by saying that most of the emissions were made from vehicles that were owned by the ‘driver-partners’ rather than the company itself. So, with direct blame for GHG emissions dodged, the company’s priority is stated as to ‘support our driver-partners in transitioning to low emission vehicles and encouraging zero-emission modes of transport.’
It really isn’t clear how that fluffy ‘transition’ might come about, since conventional motorcycles are a cheap and convenient form of transport in Southeast Asia, easily outcompeting other available options for the coal-face work required by Grab’s business model. The report says it will encourage cycling, walking, and EVs. The first two are obviously out of the question in most instances for food delivery, and as for the third, for the overwhelming majority of two-wheeler drivers, upgrading to an EV is a pipe dream (or pipe nightmare, depending on how much they know about EV recharging, weight, and maintenance issues).
One of the beauties of Grab being a platform that connects eateries with drivers without actually operating restaurants itself is that – as with GHG emissions – food packaging waste isn’t really Grab’s direct responsibility. It is the responsibility of the restaurants and food manufacturers, like the owners of the factories that make all those nasty little sachets of ketchup, soy sauce, and other condiments.
Brilliant! With this sleight of hand squarely in frame, this part of the ESG report then writes itself as an exercise in hand-wringing, admitting with furrowed brow that food packaging waste is a serious problem, and stating that the company’s goal is ‘Zero packaging waste in Nature by 2040.’ Exactly what this means and how it is to be accomplished is shrouded in mystery, but to anyone whose beach holidays have ever been marred by the ugly sight of plastic litter on the shoreline, it sounds awfully good.
Pantomime Three: Equity, Diversity, and Inclusion
Most of this section of the report consists of descriptive marketing: saying all the right things and showcasing the occasional shining example, without getting into too much detail. The main statistics given are that 43% of Grab’s employees are women and 34% of those in ‘leadership positions’ are women. Well, maybe that could be true if one counts the few thousand direct employees, including a lot of secretaries, but omits the five million ‘driver-partners’ who are overwhelmingly male. The report also says that female employees earn 98% of what men do, which presumably means that the odd male secretary is treated just as badly as his female colleagues.
This section of the report showcases other inventive labeling. We are told the company has ‘Inclusion Champions,’ collectively a group of employees who ‘contribute to inclusion through crowdsourcing of ideas and on-ground feedback for better inclusion initiatives. They also help to identify and coach fellow Grab employees towards more inclusive behaviour, and will co-drive projects that help drive inclusion.’ Who knows what that really means? One might guess that ‘crowdsourcing ideas’ is the new term for having a suggestion box, and that pretty much every email sent by HR can be contrived to be a form of ‘inclusive’ coaching.
Grab’s report thus seems like it addresses ESG- and DEI-related issues, but no real-world mechanism ties them to actual outcomes, and there is no realistic external verification. Even seemingly simple things, like counting how much fuel a company buys directly for its processes and thereby estimating the size of its ‘carbon footprint,’ are like child’s play to game, as demonstrated by Grab’s masterly reporting: simply forcing workers and subsidiaries to buy their own fuel (compensated via higher wages or other things) will make the footprint of the company itself seem dramatically lower, while requiring nothing substantial to change. It’s all an elaborate show.
Who’s Asking for This Crap?
Though specious, unverifiable, and mostly made up, ESG reporting is a way to formally present a company’s ‘ESG performance.’ This performance can theoretically be ‘scored’ by some third party, and thereby compared with that of other companies. If ESG is valued highly by consumers, then companies that get high scores should attract a disproportionate amount of investment, meaning that their cost of capital will be lower than companies who don’t score so well – the magic through which a bullshit report is turned into a business opportunity.
This also makes delicious fodder for fund managers, who can bundle firms’ stock into ‘ESG funds’ or ‘sustainable funds’ or whatever, and charge investors fat fees for the privilege of investing in them. Fund managers also have another motivation to egg on more ESG reporting: their funds are designed not to green the world or make it a nicer place, but rather to highlight which companies will adapt best and thrive the most in a world where ‘progress’ toward ESG goals (for example, ‘net zero’) is actually being made.
How big is this market? According to Morningstar, by the end of the third quarter of 2023, global ‘sustainable’ funds numbered more than 7,600, of which nearly 75% were in Europe and 10% in the US. These funds had assets of $2.7 trillion. However, global inflows into these funds have been falling sharply since the first quarter of 2022. While they have still been attracting more inflows than non-sustainability funds in Europe, this is not true in the US. Amid waning interest in the US, fewer and fewer new ESG funds are being launched, and in 3Q2023 there were more ESG fund exits than new arrivals.
During the first two years of covid, American ESG stocks outperformed conventional stocks by a wide margin. This is not surprising since technology companies did rather well out of lockdowns, and they also have high ESG scores because of their lower carbon footprints than miscreant ‘old economy’ companies. Still, since the start of 2022, ESG stocks have fallen back and now are only just edging the market. Indicatively, in the seven quarters ending September 30, 2023, the S&P ESG Index was down 7.3%, while the S&P 500 was down 9.4%.
Importantly, many ESG fund investors themselves are government-type entities, like public pension funds, where the distance between investment decision and personal consequence is about as big as it gets. So often the ultimate payers for this circus are the general population whose pensions are, unbeknown to themselves, being used for virtue-signaling by public fund managers.
Who Wins and Who Loses?
Learning how to write up and cheat with these performance reports requires a lot of resources, but once a company antes up, the game becomes easy to play. ESG reporting is just one example of the broader reality that compliance with external bureaucracies requires largely a one-off fixed cost, and in this case the cost is often large enough to bankrupt a small firm. This means that, just as bizarre covid-era rules were a gift of competitive advantage to big companies, ESG and DEI reporting is a mechanism through which big companies can pressurize and even get rid entirely of smaller ones.
This, we think, is the reason why bullshit reporting is not getting pushback from the largest companies that don’t already have natural monopolies: plainly, it suits their purposes. They are big enough to absorb the cost without a major effect on the bottom line, and they are getting in return a stronger position in their markets. They naturally support the big bureaucracies that make these reports compulsory. Big consulting companies, and the aforementioned fund managers, also love the idea of compulsory reporting because it creates business for them.
On this very issue, Michael Shellenberger opined recently on Tucker Carlson’s channel that big traditional energy companies were led by cowards who had been “bullied into submission:” that the ESG movement had “used political activism and the pension funds to put pressure on the oil and gas industries to basically sell out their main product.” He called the ESG movement an “anti-human death cult” and asserted that “it’s finally becoming obvious to people that it’s a scam.”
On the lattermost point, we hope he’s right.
Yet, the scam is still spreading, as there are plenty more unproductive people eager to climb aboard. The push for companies to jump on the ESG reporting bandwagon is not confined to the West. Regulators in Asia are also pushing — harder in some countries, like Singapore, than in others — to make ESG reporting mandatory rather than optional. Sensing a huge opportunity to divert valuable resources their way, a posse of consulting firms are also coming after companies to advise them on how they can bridge the ESG gap with the more advanced West. Companies in Asia are starting to fall in line and dutifully churn out their ESG reports, breathing more life into the scam.
Will This Eventually Crash and Burn?
Hard-nosed managers of big firms understand that bullshit reporting requirements can be a source of competitive advantage, causing financial distress for their smaller competitors. What is in the whole charade for the state bureaucracy and the corporate bureaucracy is that it makes them seem virtuous while creating a huge fog of mystery about what they are actually doing, thereby providing both jobs and cover.
Like the woke movement, ESG and DEI are at heart parasitical developments, originating from a decaying West, championed by the useless and the clueless, and benefiting the shrewd and the corrupt.
Such malignancies weaken our society and should be discarded at the earliest opportunity. Much like Elon Musk showed the door to 80% of Twitter staff with no loss of functionality, and just as we have advocated previously that 80% of employment in ‘health’ professions is useless, so too do we think that firing all professionals whose primary business involves ESG and DEI can be done without any loss of functionality. We don’t think this will happen anytime soon.
If it were to happen, what would one do with all those unproductive workers who have been dining on the ESG/DEI word-salad gravy trains for months or years? Paying them to paint rocks for a while would at least get them out of the way. Better still, taking a cue from what the Ontario College of Psychologists has suggested recently for Jordan Peterson, these people could be taken into the field to help communities struggling with actual problems, involving actual trade-offs, as part of a reeducation and retraining program aimed at making them useful to their societies once again.
Business
It Took Trump To Get Canada Serious About Free Trade With Itself

From the Frontier Centre for Public Policy
By Lee Harding
Trump’s protectionism has jolted Canada into finally beginning to tear down interprovincial trade barriers
The threat of Donald Trump’s tariffs and the potential collapse of North American free trade have prompted Canada to look inward. With international trade under pressure, the country is—at last—taking meaningful steps to improve trade within its borders.
Canada’s Constitution gives provinces control over many key economic levers. While Ottawa manages international trade, the provinces regulate licensing, certification and procurement rules. These fragmented regulations have long acted as internal trade barriers, forcing companies and professionals to navigate duplicate approval processes when operating across provincial lines.
These restrictions increase costs, delay projects and limit job opportunities for businesses and workers. For consumers, they mean higher prices and fewer choices. Economists estimate that these barriers hold back up to $200 billion of Canada’s economy annually, roughly eight per cent of the country’s GDP.
Ironically, it wasn’t until after Canada signed the North American Free Trade Agreement that it began to address domestic trade restrictions. In 1994, the first ministers signed the Agreement on Internal Trade (AIT), committing to equal treatment of bidders on provincial and municipal contracts. Subsequent regional agreements, such as Alberta and British Columbia’s Trade, Investment and Labour Mobility Agreement in 2007, and the New West Partnership that followed, expanded cooperation to include broader credential recognition and enforceable dispute resolution.
In 2017, the Canadian Free Trade Agreement (CFTA) replaced the AIT to streamline trade among provinces and territories. While more ambitious in scope, the CFTA’s effectiveness has been limited by a patchwork of exemptions and slow implementation.
Now, however, Trump’s protectionism has reignited momentum to fix the problem. In recent months, provincial and territorial labour market ministers met with their federal counterpart to strengthen the CFTA. Their goal: to remove longstanding barriers and unlock the full potential of Canada’s internal market.
According to a March 5 CFTA press release, five governments have agreed to eliminate 40 exemptions they previously claimed for themselves. A June 1 deadline has been set to produce an action plan for nationwide mutual recognition of professional credentials. Ministers are also working on the mutual recognition of consumer goods, excluding food, so that if a product is approved for sale in one province, it can be sold anywhere in Canada without added red tape.
Ontario Premier Doug Ford has signalled that his province won’t wait for consensus. Ontario is dropping all its CFTA exemptions, allowing medical professionals to begin practising while awaiting registration with provincial regulators.
Ontario has partnered with Nova Scotia and New Brunswick to implement mutual recognition of goods, services and registered workers. These provinces have also enabled direct-to-consumer alcohol sales, letting individuals purchase alcohol directly from producers for personal consumption.
A joint CFTA statement says other provinces intend to follow suit, except Prince Edward Island and Newfoundland and Labrador.
These developments are long overdue. Confederation happened more than 150 years ago, and prohibition ended more than a century ago, yet Canadians still face barriers when trying to buy a bottle of wine from another province or find work across a provincial line.
Perhaps now, Canada will finally become the economic union it was always meant to be. Few would thank Donald Trump, but without his tariffs, this renewed urgency to break down internal trade barriers might never have emerged.
Lee Harding is a research fellow with the Frontier Centre for Public Policy.
2025 Federal Election
Carney’s budget is worse than Trudeau’s

Liberal Leader Mark Carney is planning to borrow more money than former prime minister Justin Trudeau.
That’s an odd plan for a former banker because the federal government is already spending more on debt interest payments than it spends on health-care transfers to the provinces.
Let’s take a deeper look at Carney’s plan.
Carney says that his government would “spend less, invest more.”
At first glance, that might sound better than the previous decade of massive deficits and increasing debt, but does that sound like a real change?
Because if you open a thesaurus, you’ll find that “spend” and “invest” are synonyms, they mean the same thing.
And Carney’s platform shows it. Carney plans to increase government spending by $130 billion. He plans to increase the federal debt by $225 billion over the next four years. That’s about $100 billion more than Trudeau was planning borrow over the same period, according to the most recent Fall Economic Statement.
Carney is planning to waste $5.6 billion more on debt interest charges than Trudeau. Interest charges already cost taxpayers more than $1 billion per week.
The platform claims that Carney will run a budget surplus in 2028, but that’s nonsense. Because once you include the $48 billion of spending in Carney’s “capital” budget, the tiny surplus disappears, and taxpayers are stuck with more debt.
And that’s despite planning to take even more money from Canadians in years ahead. Carney’s platform shows that his carbon tariff, another carbon tax on Canadians, will cost taxpayers $500 million.
The bottom line is that government spending, no matter what pile it is put into, is just government spending. And when the government spends too much, that means it must borrow more money, and taxpayers have to pay the interest payments on that irresponsible borrowing.
Canadians don’t even believe that Carney can follow through on his watered-down plan. A majority of Canadians are skeptical that Carney will balance the operational budget in three years, according to Leger polling.
All Carney’s plan means for Canadians is more borrowing and higher debt. And taxpayers can’t afford anymore debt.
When the Liberals were first elected the debt was $616 billion. It’s projected to reach almost $1.3 trillion by the end of the year, that means the debt has more than doubled in the last decade.
Every single Canadian’s individual share of the federal debt averages about $30,000.
Interest charges on the debt are costing taxpayers $53.7 billion this year. That’s more than the government takes in GST from Canadians. That means every time you go to the grocery store, fill up your car with gas, or buy almost anything else, all that federal sales tax you pay isn’t being used for anything but paying for the government’s poor financial decisions.
Creative accounting is not the solution to get the government’s fiscal house in order. It’s spending cuts. And Carney even says this.
“The federal government has been spending too much,” said Carney. He then went on to acknowledge the huge spending growth of the government over the last decade and the ballooning of the federal bureaucracy. A serious plan to balance the budget and pay down debt includes cutting spending and slashing bureaucracy.
But the Conservatives aren’t off the hook here either. Conservative Leader Pierre Poilievre has said that he will balance the budget “as soon as possible,” but hasn’t told taxpayers when that is.
More debt today means higher taxes tomorrow. That’s because every dollar borrowed by the federal government must be paid back plus interest. Any party that says it wants to make life more affordable also needs a plan to start paying back the debt.
Taxpayers need a government that will commit to balancing the budget for real and start paying back debt, not one that is continuing to pile on debt and waste billions on interest charges.
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