Is ESG the Chinese Social Credit System in Disguise?

An Interview with my Coauthor W. David Prescott on our new book:
Creative Destruction: How ESG Mandates Are Destroying Capitalism, Costing You Money, and Wrecking America

You can watch the full interview on YouTube.

MA: David, many people, even highly educated ones, don’t know what ESG stands for. Can you explain it and why it matters?

DP: Hey, Michael, thanks for having me on. And before we dive in, just a quick shoutout to you. To everyone listening, if you want an incredible partner who can bring clarity to even the most random, ADHD-fueled thoughts—which I have plenty of—Michael Ashley is your guy. It’s been an amazing experience working together, and I appreciate you more than words can express.

Now: ESG. ESG stands for Environmental, Social, and Governance. These are three criteria established by various organizations worldwide to measure how effective a company is in certain areas.

• Environmental (E): This focuses on how a company acts as a steward of nature, evaluating factors like energy use, waste management, pollution, and conservation of natural resources.

• Social (S): This looks at how companies manage relationships with employees, suppliers, customers, and the communities they operate in. It covers topics like diversity and inclusion (DEI), human rights, and labor practices.

• Governance (G): This involves company leadership, executive pay, audits, internal controls, shareholder rights, and diversity on one’s board.

As discussed, while writing the book, most of the population—around 98%—don’t even know what ESG stands for. Of the remaining 2%, very few have taken the time to understand the implications of these criteria.

MA: I couldn’t agree more. When I ask people in my own family what ESG stands for, they can’t tell me. A few years ago, someone told me ESG is like the American version of the Chinese social credit system—but applied to businesses. Does that resonate with you?

DP: It does. With your experience in China and seeing its surveillance state, you can recognize parallels when applied to American businesses. Let me share an example. My company, which I’ve owned for 27 years, provides environmental consulting and field services for oil and gas.

After a successful groundwater remediation project for a Fortune 500 client, they called to discuss our ESG compliance, specifically Scope 3 emissions. They asked if we’d considered electric drilling rigs, though such rigs don’t exist, and even if they did, they’d cost four to five times more than diesel rigs.

When I asked if they’d pay extra for this technology, they said no—it must remain cost-competitive. Still, they insisted it’s “the right thing to do.” Then, they moved to social criteria, asking about donations and giving back. I explained our company focuses on doing great work, meeting client needs, and turning a profit, leaving giving decisions to our employees.

Finally, they questioned the governance of my leadership team. I told them I choose the best team for success, not to meet arbitrary criteria. When I asked why they were enforcing this, they admitted it was to meet ESG score requirements. This mirrors the Chinese social credit system—forcing private companies to comply with public standards.

MA: It seems like this is part of a calculated effort to de-industrialize the West, particularly targeting areas like food production, energy independence, and infrastructure—essentially undermining our entire way of life. What's your take on that?

DP: That's exactly accurate. In the hydrocarbon space, particularly in the Permian Basin in Midland, a friend of mine, who’s part of a third-generation oil and gas family business, ran into this issue. They had funding from private equity firms eager to invest in hydrocarbons, but when the firms reviewed their ESG scores, they were told to stop spending on hydrocarbons.

The private equity firm called the owner and said, “Don’t spend another dime on hydrocarbons,” even though the company was meeting all their financial goals. The response was that their activities didn’t align with ESG objectives and climate change initiatives, as the firms believed it was their duty to “make the world a better place.” This is how large companies enforce ESG mandates, pulling capital from smaller businesses and forcing compliance with their vision of what’s “right.”

MA: It feels like the real losers in this push for ESG and climate policies are everyday people, not the wealthy elites who are living in a different world. What are your thoughts on this?

DP: I completely agree. When you look at the disparity between the ultra-wealthy and the rest of society, it’s striking. For example, if an average person in America manages to retire with $10,000 to $15,000 saved, they’re doing well. But for a billionaire, that’s about an hour’s worth of jet fuel for their Gulfstream.

The rich are able to live their lavish lifestyles, flying private, while the rest of us are being told we must make sacrifices for the environment. It’s a huge infringement on personal liberties, especially for the middle and lower classes who are already struggling. And you're right, many people don’t even realize how these policies are being pushed on them.

What’s even more frustrating is that the whole climate change narrative is based on a distorted view. Yes, we may be experiencing meteorological changes, but it’s not necessarily because of hydrocarbons. There’s a long history of climate fluctuations—just look at the Ancestral Puebloans in the American Southwest who were forced to migrate due to a prolonged drought.

This isn’t something new; it’s been happening throughout human history. But what’s happening now is that elites, like climate czar John Kerry, are using the climate agenda to impose restrictions and burdens on the everyday person while they continue to live their lives without consequence. It’s the lower-income individuals who will feel the brunt of these policies, facing more restrictions, higher costs, and ultimately, it will affect their quality of life, including their retirement plans. The elites get to keep their wealth and privilege, while the rest of us are told to bear the burden of their decisions.

MA: Why isn't planting trees ever mentioned in the climate change conversation? And speaking of carbon emissions, I remember you telling me a story in Amarillo about a friend who couldn’t get financing for a private plane because his carbon footprint was too high.

DP: Right. A friend of mine wanted to buy a jet but the bank would not loan him the money. The bank said his carbon footprint was too high. What’s crazy is that he had the right financial strength to qualify for the loan. However, he was still locked out.

MA: It reminds me of the concept of 15-minute cities. On the surface, it sounds good—you’re within a short distance of everything you need. But the flip side, as I saw in London with congestion taxes, this restricts movement and freedom under the guise of combating climate change. This slow rollout of restrictions, normalizes control. It feels like a gradual dragnet around ESG that will eventually affect everyone, even regular bank applications.

DP: You’re spot on, Michael. Just today, I read in Reuters that New York City’s Metropolitan Transportation Authority is implementing a $9 congestion mitigation charge for driving in Manhattan starting January 5. They claim it’s to raise billions for mass transit and cut traffic, but it echoes what you experienced in London years ago.

As for 15-minute cities, we also see related measures in France, where regional flights under an hour are restricted to reduce emissions. For someone like me in Amarillo, Texas, such policies would have a huge impact. We rely on eight daily flights to Dallas for connections and business. Removing those flights would mean hundreds more cars on the road, causing even greater congestion and emissions. It’s counterproductive.

These policies claim to address climate change but create inefficiencies instead. They’re forcing us into a system that doesn’t solve the root issues—whether it’s emissions, congestion, or human impact on the environment. The real question is whether the problem is actually climate change or simply the growing number of people on the planet, now at 8.8 billion. Measures like these seem to miss the mark entirely, focusing on restrictions rather than true solutions.

MA: Right. ESG targets the U.S. and Canada yet leaves countries like China and India unchecked. If hydrocarbons are causing climate change, why focus only on the U.S. while letting these countries pollute without consequence?

DP: Let’s examine this. In the U.S., we have strict environmental laws, funded by the wealth built on hydrocarbons—dense energy sources that created a robust GDP and tax base. This allows us to maintain clean water, air, and remedial activities to protect the environment.

Yet, we can’t even permit new coal-fired power plants, while China brings two massive 250-kilowatt units online every week. What happens to the emissions from those plants? They join the jet stream and head to the U.S. West Coast or Alaska. It’s like a swimming pool—if one person pollutes it, we all swim in the contamination.

While the U.S. cripples its energy production, we’re already at a power deficit, unable to fully support AI and other technological advances. Meanwhile, China’s growing coal capacity, along with India and Brazil, gives them an energy surplus and strategic advantages. They’re not held to environmental regulations or cleanup costs, and yet, ESG is supposedly about protecting the planet. In reality, it’s harming the very environment it claims to save, while undermining our energy independence and security.

MA: I agree, and it seems like they’re picking winners and losers, deciding which countries can thrive. After the election, some believe the sea change of leadership could help defeat ESG. Given the election results, do you feel encouraged?

DP: Absolutely, I’m encouraged about the possibility of reducing ESG’s influence and making it a level playing field. I don’t believe the incoming administration will tolerate this. They’ll focus on an "America first" approach, emphasizing energy independence through hydrocarbons and natural energy, aiming to rebuild the industrial complex and reduce reliance on our enemies. But let’s not forget that Klaus Schwab wrote about the "Great Reset" in 2020, and the forces behind ESG won’t back down easily.

MA: Right. His great reset book “miraculously” came out in June 2020, just three months after the world shut down.

DP: Right. He wrote that material in 2020, now here we are in 2024. While the new administration may help curtail ESG, these forces aren’t going to be swayed by a four-year presidency. Countries like China work on 50-year plans, while the U.S. vacillates every four to eight years.

Thankfully, we now have some unity between the House, Senate, and executive branch, which could roll back some of ESG's effects. But these forces are still in play. What’s striking is that 98% of people still don’t understand what ESG is. It’s not front and center in the U.S. yet, but it’s already dominant in Western Europe and other westernized nations. Meanwhile, countries like China, India, and regions like the Middle East, Africa, and South America will likely remain unaffected. Hopefully, the new administration can bring relief to our industries and potentially repeal it formally.

MA: What’s necessary is a shift in thinking. We need a long-term plan. We need to look at the bigger picture, not just the immediate future.

DP: That’s exactly what we need. When we were writing the book, we were both motivated by a higher calling. As fathers and people who care about our country, we realized the ESG movement and mass hysteria around these issues are actually doing more harm than good. They’re pushing us into a future where the government controls decisions for us and undermines our values and our ability to thrive as individuals and as families.

I think about the long-term consequences, and the need to push back against forces that don’t align with our beliefs. I truly believe that if we had more long-term thinkers, things would be different here. But right now, we’re stuck in this cycle of short-term thinking, and it’s leading to disastrous consequences.

MA: Right. It feels like we’re only planning in two-year increments. Look at the last presidential election—Trump was already campaigning just two years into Biden’s presidency, maybe even earlier. The whole process becomes this big spectacle, a contest like WWF, that we all watch but don’t participate in. Instead of focusing on improving our country or getting involved, we’re just watching and waiting to see who spends the most and wins.

DP: Exactly. It’s all about who outspends whom, rather than addressing the long-term challenges we face. That’s why this issue is so much bigger than politics. People think of ESG as a partisan issue, but it’s not. It’s a survival issue. When food prices are 70% higher, or shelves are empty because the crops weren’t produced, it doesn’t matter what side you’re on—it impacts everyone. This is something Michael and I emphasize in the book: we all live on this planet, and ESG policies affect us all. It’s not about being a Republican or Democrat; it’s about protecting our future and our children’s future.

MA: That’s exactly right. The book highlights how ESG isn’t just political—it’s personal. When people understand the stakes, they realize it’s about survival, not party lines. These issues affect everyone, and they require universal concern.

DP: Absolutely. Let’s take the grocery store. Most people don’t realize stores only have three to five days’ worth of staple items. If the supply chain breaks down, that abundance we’re used to disappears quickly. Now think about ESG’s push to eliminate hydrocarbons.

Without natural gas, which is crucial for making fertilizer, crop yields would drop by 60% to 80%. Imagine walking into a grocery store and seeing 75% of the cereal aisle gone—that’s the reality without fertilizer.

And natural gas, a byproduct of drilling for oil, is under attack because banks and lending institutions tied to ESG scores won’t fund oil and gas projects. This is just one example, but it’s a critical one. Without natural gas, we lose fertilizer; without fertilizer, we lose food. This undermines the very basics of Maslow’s hierarchy: food, water, and shelter. ESG policies are dismantling the foundations of our society, and most people don’t even realize how fragile the system really is.

MA: I’m so glad you brought up Maslow’s pyramid because it highlights this sickness. The fact that abundant Americans can even suggest eliminating fertilizer or stopping drilling—all the things that sustain our abundance—comes from material comfort. Their basic needs are met, so they create imaginary problems to fill a void in their lives. They’re not hungry, their kids aren’t hungry, so they dream up crises. With this book, we hope people wake up, see past the lies, and become informed about ESG. David, before we close, do you have any final thoughts, and could you share where people can find the book?

DP: Michael, it’s been an absolute pleasure working on this project with you. I encourage anyone looking for help on a creative project or book to reach out to Michael—he’s incredible. He took the ramblings of an environmental scientist and helped craft a manuscript that could move the needle, much like Rachel Carson’s Silent Spring or Upton Sinclair’s The Jungle.

This book is meant to start conversations—not just with coworkers but with your kids, grandchildren, spouse, and community. It’s written in an accessible format, not overly scientific, so anyone can understand it. It’s challenging but eye-opening, designed to help individuals, families, and communities see what’s really happening.

You can find Creative Destruction on Amazon or visit our site: creativedestructionbook.com. If you buy it, please leave a review—we’d love to hear your thoughts. Thank you all!