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Op-Ed: The Fight Against ESG Is Gaining Momentum

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Efforts to impose environmental, social and governance scores upon all sectors of the U.S. financial system, dismantling our free market economy in favor of “stakeholder capitalism,” continue to escalate.

The goal of this system — which is ostensibly to combat climate change and address social justice issues — is rather to centralize power and control amongst a cabal of economic and political elites, from the World Economic Forum’s Klaus Schwab, to BlackRock’s Larry Fink, to Bank of America’s Brian Moynihan, and even to President Joe Biden and other actors within the U.S. government and the global political establishment.

Fortunately, substantial efforts to combat the rise of global fascism — which is what would ultimately result from ESG’s all-encompassing societal permeation — are exponentially rising at both the state and federal levels.

In 2022, four states — Kentucky, Oklahoma, Tennessee and West Virginia — have passed legislation designed to protect their states’ economies, businesses and constituents from the detrimental effects of coercive ESG implementation.

Democratic Kentucky Gov. Andy Beshear signed legislation requiring any state governmental entities to divest from financial services firms if they do not cease using ESG frameworks to manipulate investment markets against certain Kentucky companies that do not adhere to progressive political goals. Kentucky Attorney General Daniel Cameron wrote a strong opinion in support, holding that stakeholder capitalism and ESG investment practices are “inconsistent with Kentucky law governing fiduciary duties owed by investment management firms to Kentucky’s public pension plans.”

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Oklahoma, Tennessee and West Virginia passed very similar bills, divesting state entities from investing with any financial institutions propagating the fossil fuel boycotts that have damaged their states’ economies and the livelihoods of their citizens.

Efforts at the state level do not end with those four states. At least 21 more have been galvanized by their peers and are in the process of developing anti-ESG bills for passage in upcoming legislative sessions.

Of these, Florida has been one of the more resounding and impactful successes. Gov. Ron DeSantis made an official statement in July announcing legislative initiatives and administrative actions to combat ESG, declaring, “From Wall Street banks to massive asset managers and big tech companies, we have seen the corporate elite use their economic power to impose policies on the country that they could not achieve at the ballot box. … We are protecting Floridians from woke capital and asserting the authority of our constitutional system over ideological corporate power.”

Floridians are not alone in their fight. For example, nearly all of Utah’s leadership has denounced ESG’s implementation to downgrade Utah’s credit rating based on ideological factors rather than traditional financial metrics. Republican Sens. Mitt Romney and Mike Lee, Republican Gov. Spencer Cox and other prominent politicians from Utah, including state Treasurer Marlo Oaks and Utah’s entire congressional delegation, penned a letter to S&P in April objecting to the use of ESG disclosures in the realm of public finance.

In Texas, Comptroller Glenn Hegar — in addition to other influential Texans such as Rep. Dan Crenshaw — has been an outspoken opponent of the practice.

The efforts of Utah’s Oaks and Texas’ Hegar are just two examples of a larger impetus from a wide array of state treasurers, auditors, comptrollers and other officials working through laws and regulations to fight against ESG. West Virginia Treasurer Riley Moore has already used the aforementioned legislation to ban BlackRock, Goldman Sachs, JPMorgan Chase, Morgan Stanely and Wells Fargo from doing business with West Virginia based on violations of the new statute.

Though this battle has largely been at the state level, it is quickly bubbling over to the national consciousness.

Congress has seen a surge in proposed federal legislation to oppose ESG. In the Senate, the Investor Democracy Is Expected Act, introduced by Republican Sen. Dan Sullivan of Alaska, is one example, and has a dozen prominent Republican co-sponsors. Another such effort is underway in the House of Representatives; the Ensuring Sound Guidance Act, introduced by Republican Rep. Andy Barr of Kentucky, has more than a dozen co-sponsors.

GOP lawmakers have also stated their intention to remove the Securities and Exchange Commission’s new proposed rule that would “promote consistent, comparable, and reliable information for investors concerning funds’ and advisers’ incorporate of environmental, social, and governance (ESG) factors.”

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In addition, former Vice President Mike Pence wrote a blistering Op-Ed against ESG for The Wall Street Journal in May. Republican Texas Sen. Ted Cruz took aim at BlackRock CEO Larry Fink in May for using his leverage in corporate boardrooms to force ESG onto corporations, causing higher energy prices across the economy, among other deleterious effects.

Politicians such as Pence and Cruz — as well as newly christened anti-ESG crusader DeSantis — have the ability to influence the entire country. Especially if, as widely assumed, they have 2024 presidential aspirations.

Substantial momentum continues to build against ESG. That said, there is much more work to be done, and pressure against this system must continue to mount if we are to preserve prosperity, democracy, liberty and economic freedom.

The views expressed in this opinion article are those of their author and are not necessarily either shared or endorsed by the owners of this website. If you are interested in contributing an Op-Ed to The Western Journal, you can learn about our submission guidelines and process here.

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Jack McPherrin (jmcpherrin@heartland.org) is a research editor at The Heartland Institute.




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