The environmental, social, and corporate governance (ESG) movement has been gaining steam in corporate America for years. Many have pegged the movement as a far leftist social justice initiative disguised as an effort to promote better business practices.
President Joe Biden and his team have been vocal supporters of the movement and has looked at ways to use the government to bolster the effort to get as many corporations on board as possible. But Republican officials are fighting back against the push to cow businesses into adopting so-called progressive ideology in the workplace.
As we reported earlier, a coalition of 19 Republican governors declared their intention to work together to defeat the rise of ESG in their states. Florida Gov. Ron DeSantis cobbled together the gaggle of governors to make a statement against efforts to enforce ESG standards on businesses. Fox News reported:
Gov. Ron DeSantis, R-Fla., joined forces with 18 GOP governors to reject President Joe Biden’s environmental, social and corporate governance (ESG) “agenda,” claiming the push is a “direct threat” to the economic freedom of American retirees.
Governors in Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, West Virginia and Wyoming formed the alliance Thursday in what they described as an effort to ensure American retirement funds are not used for “woke” investments.
In a written statement, the governors accused President Biden of putting his “political agenda above the wellbeing and individual freedoms of hardworking Americans.”
The statement continued:
“We as freedom loving states can work together and leverage our state pension funds to force change in how major asset managers invest the money of hardworking Americans, ensuring corporations are focused on maximizing shareholder value, rather than the proliferation of woke ideology.”
The governors also cautioned that the spread of ESG in the United States “is a direct threat to the American economy, individual economic freedom, and our way of life” and argued that the movement is an attempt to place “investment decisions in the hands of the woke mob to bypass the ballot box and inject political ideology into investment decisions, corporate governance, and the everyday economy.”
The ESG movement identifies environmental, social, and governance, as three key factors that should be used to determine the sustainability and ethical impact of specific investment and business decisions.
Environmental factors are related to a corporation’s impact on the environment. This includes carbon emissions, waste management, and how natural resources are consumed. Social factors involve the corporation’s effect on society. It includes its relationships with stakeholders, community involvement, and others. Governance deals with the corporation’s leadership, transparency, and ethical practices. This includes the makeup of its board of directors, how executives are paid, and the level of corruption tolerated in the organization.
Like every other far leftist initiative, ESG sounds wonderful, until you get a look under the hood, so to speak. In reality, it is a way for progressives to execute their climate change agenda through corporate America. The movement is also intended to infuse corporate culture with “woke” ideas on race, gender identity, sexuality, and others. It is one of the reasons why so many businesses have pandered to far leftist causes. The governance bit is part of the far-left’s obsession with “diversity.” Its standards require businesses to employ, and do business with, a certain level of racial and sexual minorities, along with members of other “marginalized” groups.
Detractors of ESG have constantly pointed out that the movement has little to do with corporate performance and more to do with injecting progressive politics into corporate America. Marlo Oaks, the Utah State Treasurer, has been a loud voice preaching against the ills of ESG. While speaking at the Salt Lake County Republican Party Convention, he told delegates that the movement “opens the door to authoritarianism” and is “Satan’s plan.”
Currently, the GOP governors have not yet indicated what their alliance will entail. But some have already championed legislation that would prohibit their states from doing business with entities that embrace ESG standards. There have been other ideas for opposing the proliferation of the ideology as well.
Still, it will be interesting to see what this coalition produces in terms of policy that could tackle the ESG movement. Governments could potentially play a role in stymying the movement – especially if and when it violates the rights of Americans. Nevertheless, this, like most other problems, is cultural and societal in nature. Republicans can prevent their governments from using their authority to enforce these standards. But there must be victories in the broader cultural war to dissuade companies from bowing down to the Marxists. This will likely be a battle fought on the ground, not in the halls of legislatures.
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