Republicans launch counteroffensive against latest woke corporate push: ESG investing
Goal is to resist growing movement to favor funds that make decisions based on environmental, social, governance, or political criteria.
From Congress to the statehouse, Republicans are fighting a growing movement to force investments into funds that make decisions based on environmental, social, governance, or political criteria.
The Environmental Social Governance (ESG) movement has prompted the Securities and Exchange Commission to propose a rule requiring companies to report emissions and other climate risk data, while public pension funds like the Thrift Savings Plan are discussing using ESG metrics to govern investment decisions.
The GOP pushback has intensified in recent days.
Rep. Chip Roy (R-Texas) led a group of eight Republicans on Friday proposing the "No ESG at TSP Act" that would prevent participants in the federal Thrift Savings Plan (TSP) from investing monies in ESG funds.
"ESG investing is a woke scam," Roy said. "It restricts the free flow of capital, undermines U.S. energy freedom to the benefit of our enemies, and advances woke racial and gender ideologies intent on dividing the republic.
"The upcoming changes to TSP would allow billions of taxpayer dollars to serve these ends. The federal government shouldn't have any part in this radical nonsense, and especially shouldn't be using your money to do it."
The TSP is the largest defined contribution plan in the world and benefits federal employees and service members.
Meanwhile, Republicans in both chambers of Congress are urging the SEC to withdraw a proposal that would require companies to disclose greenhouse gas emissions, arguing the requirement exceeds the regulatory agency's authority.
"It is unclear from where the SEC has derived this drastic change in authority," Republicans on the Senate Banking, Housing, and Urban Affairs, and the Environment and Public Works committees wrote SEC Chairman Gary Gensler last month. "The SEC is not tasked with environmental regulation, nor has Congress amended the SEC's regulatory authority to pursue the proposed climate disclosures."
At the state level, Utah Treasurer Marlo Oaks is leading an effort to block a major financial services firm from supplementing its analysis of states with a score on certain ESG indicators, such as exposure to climate risk and demographic trends.
West Virginia Attorney General Patrick Morrissey told Just the News it is essential to combat the ESG movement before it takes corporations away from their core competencies, such as serving customers and returning value for investors.
"There's been an increasing amount of pressure on corporate America and in these corporate boardrooms, to kowtow to the left's agenda," Morrisey told the John Solomon Reports podcast. "And people have tried to move the institutional investment community, they've engaged in proxy fights and have fought in order to push corporations to move away from their core mission, and get them to focus on ESG-related issues, diversity, and many other topics that may be outside the core function of the company.
"What the Biden administration is trying to do is transform the SEC, which is always known to be a securities enforcer, and transform it so that it puts massive pressure on public companies to change how they handle environmental emissions. And that's a big problem, not only because it's not the role of the SEC, and it's more of the role of an environmental regulator.
"We're not going to recognize a free market capital system, when the enforcement arm starts to engage in agenda promoting, and that's what's occurring. ... It's not right. And Congress needs to step up and make a decision pertaining to emissions and environmental matters, not your Securities Exchange Commission, which is supposed to look out for investors, and future financial performance and material financial matters, not just woke agenda items."