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What is ESG and why is Glenn Beck blaming high gas prices on it?

Gas prices that could exceed $6 this summer aren’t just about sanctions against Russia, the talk show host says

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Cars line up for gas outside a Costco Wednesday, May 11, 2022, in Pewaukee, Wis.

Cars lined up for gas outside a Costco Wednesday, May 11, 2022, in Pewaukee, Wisconsin, when the price was less than $4 a gallon, some of the cheapest in the area.

Morry Gash, Associated Press

Some analysts are predicting that the average price of gas in the U.S. will hit $6 this summer because of low inventory and increased demand as Russia’s military action in Ukraine continues. But radio talk show host Glenn Beck thinks something else is responsible: ESG.

ESG — an acronym for environmental, social and governance standards that companies increasingly embrace — represents the expansion of a company’s goals from making money and increasing its value to shareholders to accomplishing social goals that benefit “stakeholders,” such as being climate friendly and having sustainable practices.

Some investors make decisions based on companies’ ESG rankings, which is why Tesla’s recent removal from the Standard & Poor’s ESG index matters. Tesla CEO Elon Musk responded to the action with a series of tweets saying that ESG is a scam that has been “weaponized by phony social justice warriors.” He noted that ExxonMobil is among the index’s top 10, along with Apple, Amazon and Microsoft.

The S&P Indexology Blog said that Tesla was disqualified, despite being the world’s largest manufacturer of electric vehicles, because of the company’s “(lack of) low carbon strategy and codes of business conduct” related to allegations of racial discrimination, substandard working conditions at a plant in Fremont, California, and “its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot vehicles.”

“While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens,” the blog said.

Companies are excluded from consideration for the list if they manufacture tobacco products, extract thermal coal or oil sands, or manufacture parts for controversial weapons, among other things.

The Biden administration is seeking to allow ESG consideration in retirement plan investing, which would be a reversal of policies under former President Donald Trump. A decision is expected this summer.

As Musk’s tweets indicated, ESG has become a political dividing line, and Beck devoted much of his latest book “The Great Reset” to addressing how he believes an overemphasis on a “green” agenda is contributing to a new world order.

He spoke again Thursday about how an overemphasis on wind and solar energy, and a corresponding devaluation of fossil fuels, has contributed to record high gas prices, which is something he was saying in February, when it was the prospect of gas at $5 a gallon that was spooking the nation.

ESG standards are also hurting states as they have the potential to damage the credit ratings of even “booming, healthy states that might not have the ‘correct’ political views, as Jay Evensen recently wrote for Deseret News.

Meanwhile, gas prices are continuing to affect Americans of all political persuasions, regardless of how they feel about ESG.

AAA is reporting gas prices exceeding $6 on gallon on the West Coast, and an average of $4.601 in Utah. The national average Thursday was $4.589, up from $3.043 a year ago.

The only states that remain under $4 a gallon are Georgia, Kansas and Oklahoma, AAA said.