Pro-market elected officials and thought leaders are fighting back against progressive activists’ creeping capture of corporate America through the Environmental Social and Governance movement.
ESG investment strategies, increasingly prevalent among large asset management firms, seek to leverage passive investors’ assets to steer corporate decision-making to promote progressive social and environmental priorities. ESG has often been compared to the “social credit” system used by China’s ruling communist elite to enforce political conformity on its population.
Oklahoma Republican Gov. Kevin Stitt made headlines recently by signing a major anti-ESG bill called the Energy Discrimination Elimination Act of 2022, which requires the state to divest holdings in financial organizations that boycott the energy industry.
“As a state, we’re not going to invest with them if they’re going to be attacking our way of life and if they’re going to be attacking our energy industry,” Stitt told the “The Push for ESG: Social Credit and the New Cancel Culture,” a new special report hosted by John Solomon and sponsored by Heritage Action for America.
“Why would an investor not want you to be focused on returns and focused on more of these social issues?” Stitt asked. “It just makes no sense to average Americans, and we’re pushing back. We’re not going to do business with people that don’t promote our assets.”
Warning that ESG is a “significant threat to democracy,” state Rep. Paul Renner (R-Fla.) explained how Florida is now requiring state pension funds to be invested in the financial interests of beneficiaries rather than to advance extraneous politcal agendas.
“We put guardrails around our pension and made sure that they can only invest based on rate of return,” Renner said. “We have conservatives and liberals in our state. I’m going to be defending this in the House and in the Senate, and the governor is going to be defending everyone’s pension. That’s their money, not ours. And it should be invested based upon rate of return and rate of return alone.”
West Virginia has also been pushing back against ESG by not investing its assets with financial institutions that boycott energy companies.
“We generate a lot of money from the fossil fuel industries here in West Virginia,” state Treasurer Riley Moore said on the special.
“There’s a clear conflict of interest there for us to hand over dollars generated from those industries, to a financial institution that’s trying to diminish those funds at the exact same time,” he explained. “So it did not make sense for us to continue to do business with those firms.”
Former CEO of Carl’s Jr. and Hardees Andrew Puzder has created an anti-ESG exchange traded fund as a counterweight to ESG investing.
“ESG investing is all about accomplishing liberal political objectives,” said Puzder, author of “Capitalist Comeback: The Trump Boom and the Left’s Plot to Stop It.”
“But the right objective is to concentrate on returns for investors, returns for shareholders,” he said. “And our theory is that companies that focus on profits rather than politics are going to be more profitable than companies that focus on politics rather than profits.”
Puzder called ESG “socialism in sheep’s clothing,” warning it could end up destroying the U.S. economy.
“Elon Musk came out and said that he was convinced ESG was the devil incarnate,” Puzder noted. “I mean, the CEOs will tell you that this is an evil, terrible thing. And they’re being forced to focus on things other than the interests of their investors and shareholders.”