January 26, 2023
ESG: Expect More Red State & Congressional Backlash
The anti-ESG strategy pursued by many Republican elected officials has proven to be a winner in red states, and this article from Mother Jones says that those efforts are likely to pick up steam in the coming year. This excerpt provides a preview of coming attractions:
– With Republicans in control of the House of Representatives, the congressman expected to head the Committee on Financial Services, Rep. Patrick McHenry of North Carolina, plans close oversight of the Securities and Exchange Commission and its proposed climate-risk disclosure rules, which he sees as part of a “far-left social agenda.”
– Red-state attorneys general have signaled their readiness to go to court to challenge both the SEC and corporate and Wall Street ESG policies. Notably, they suggested in a letter to BlackRock last year that its activities with net-zero emissions groups raised antitrust concerns.
– The American Legislative Exchange Council, or ALEC, an association of state legislators that gets most of its funding from corporate sources and right-leaning foundations, is pushing for laws barring state pension funds from considering social and environmental factors in their investment decisions.
Interestingly, however, a recent Politico article reports that some cracks may be beginning to appear in the anti-ESG coalition. The article points out that last week, ALEC’s board of directors rejected a proposal that would give states a legislative template to stop doing business with companies that boycotted fossil fuels and says that opposition to anti-ESG initiatives appears to be growing among Republican moderates.
– John Jenkins