For years, BlackRock CEO Larry Fink has been on the leading edge of a seismic shift from a traditional view of business that focuses on serving customers and shareholders to one that is beholden to far more unwieldy and ill-defined beneficiaries known as “stakeholders.”

“Stakeholder capitalism,” mainstreamed in 2019 by the Business Roundtable and typified by Fink’s overly simplistic assertion that businesses should “focus on more than profits,” has become the new normal in the West, including Corporate America. While perhaps well-meaning, it has been used to launder radical social and environmental agendas from political activists into the commercial marketplace. And it has relied on the fictional Gordon Gekko and a caricatured version of Milton Friedman’s shareholder theory as the problem for which it is the cure.

And it’s posing a real threat to the God-given freedoms of every American.

As opposition to stakeholder capitalism and its synonymous acronym ESG (environmental, social, governance) has mounted, Fink himself has publicly cut ESG from his vocabulary altogether.

In a 2022 report on ESG, Nebraska Attorney General Doug Peterson observed that the approach to investing is an end-run around the political process. Rather than relying on the often-slow process of persuading voters to enact their preferred policies, activists have successfully weaponized ordinary citizens’ financial investments to push a radical political agenda that has little chance of succeeding at the ballot box.

A prominent example of this phenomenon is the Human Rights Campaign-backed “Business Coalition for the Equality Act,” which agitates for federal legislation that seeks to elevate sexual orientation and gender identity to the same level of race, color, religion, sex, and national origin in federal law. This proposal poses a deliberate and substantial threat to free speech, religious freedom, and the progress that women have made toward true equal treatment under the law.

In practice, the Equality Act would coerce people who willingly serve everyone to promote messages and celebrate events that conflict with their beliefs. It would harm equal treatment of women by forcing them to compete against men in their own athletic events and share private spaces with people of the opposite sex. And it would harm religious freedom by coercing uniformity of thought and speech on marriage, sex, and what it means to be male and female.

While virtually all of the Equality Act’s support comes from one side of the political aisle, its support throughout Corporate America is ubiquitous, boasting more than 550 member companies—including 56 percent of those scored on the 2024 Viewpoint Diversity Score Business Index.

The average C-suite executive, whether from their own conscience or from the pressure of activist shareholders, advisors, or even government regulators, too often see themselves as political actors. This only highlights the growing disconnect between corporate leaders and everyday Americans on hot-button issues.

Despite a high level of public support for Florida’s 2022 Parental Rights in Education bill, for example, 284 large corporations, including The Walt Disney Corporation, Starbucks, Target, Apple, and financial institutions including Deutsche Bank and PNC Financial Services Group, signed the Human Rights Campaign’s statement opposing such state-level legislation.

The misguided approach of stakeholder capitalism and ESG needs to be countered with a robust understanding of the inherent virtue of business, which contributes to human flourishing not by subverting or interfering in the political process, but by delivering excellent products and services that depend upon ethically sound workforces and supply chains.

David Bahnsen, founder, managing partner, and chief investment officer of The Bahnsen Group and a member of the Viewpoint Diversity Score advisory council captures this in a piece at WORLD magazine.

“In summary, our duty in producing goods and services is to bless our customers and do our work excellently,” writes Bahnsen. “We have not just a right, but a duty, to defend against external forces that may represent an existential threat to our enterprise.”

Likewise, fellow Viewpoint Diversity Score advisory council member and dean of the Busch School of Business at the Catholic University of America Andrew Abela contrasts the “woke capitalism” approach with a healthy corporate culture dedicated to delivering value for customers, employees, and shareholders.

“This straightforward and principled approach to entrepreneurship and management is the best alternative to woke capitalism,” writes Abela at the Wall Street Journal. “It grounds business in lasting principles while recognizing that the creation of goods and services for society is good in itself. When done fairly and honestly, commerce does not have to be apologized for or justified through ‘woke-washing.’ Instead of using business to further divide the country and sideline people of faith, companies can take a ‘live and let live’ approach.”

As corporations wrestle with the negative implications of stakeholder capitalism and ESG, many are looking for an offramp from these failed strategies. Along with our annually updated Business Index, Viewpoint Diversity Score offers a suite of resources to help corporate leaders chart a new course.