Conservative group takes anti-ESG campaign to the next level

Illustration: Maura Losch/Axios

A conservative group leading the charge against “awakened capitalism” is taking its campaign to the next level, giving congressional leaders a detailed roadmap for dismantling the environmental, social and governance (ESG) movement.

Why it matters: A new report from Consumers’ Research contains a long list of specific questions for House Republicans during public hearings to establish fact patterns for lawsuits and prove asset managers are failing their fiduciary duty in the name of political causes.

  • The 30-page report alleges that “some of the world’s largest asset managers have used American savings to force companies to adopt critical race theories, boycott states with Republican governments, fund worker abortions, and divest oil drilling investments. and natural gas, among a wide variety of other leftist causes.”
  • It calls ESG an “existential threat to our freedom”.

Send the news: Republicans have already drawn blood — and forced a split in the Democratic Party — by targeting ESG investing.

  • At the state and federal levels, Republicans want to stop corporate America from promoting policy positions that conservatives say voters have not embraced.
  • ESG supporters insist they offer products for investors who want to support companies that align with their values ​​- everything from climate change to reproductive rights.
  • Last week, House Republicans passed a resolution to remove a Labor Department rule that allowed certain ESG investments by pension funds.
  • Two vulnerable Democrats up for reelection in 2024 — Senators Joe Manchin (DW.Va.) and Jon Tester (D-Mont.) — broke with the White House to join the Republicans, likely leading to Biden’s first veto of his presidency.

What they say: Intentionally designed to be opaque yet appear benign, ESG poses a serious threat to America. ESG is the weaponization of US investment against its own citizens,” Will Hild, executive director of Consumers’ Research, wrote in a letter to congressional leaders.

  • “This is a far cry from capitalism as America has long known it,” the report claims, before providing a step-by-step guide to “defeating” the movement through existing legislation and strict oversight.

Between the lines: Consumers’ Research, with a budget of $8 million in 2021, “has turned into a self-proclaimed watchdog of liberal causes,” according to the Washington Post.

  • Anti-ESG sentiment is running high in the Republican Party. Last year, nearly 20 attorneys general, led by Arizona’s Mark Brnovich, wrote a letter to the Securities and Exchange Commission asking it to investigate BlackRock’s ties to China and whether it prioritized its fiduciary responsibility to investors.
  • Asset managers such as BlackRock and State Street Global Advisors emphasize that they are responding to investor demand and emphasize that many of their so-called ESG vehicles, such as funds focused on energy transition, have performed well in the market.

Read the letter … Read the report.

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