Environmental, social, and corporate governance (ESG) has been one of the most popular investment trends in recent years. While it encourages businesses to be more environmentally and socially responsible, it’s frequently criticized for advancing a “woke” agenda.
Republican governors such as Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott are among many who speak out against ESG. The disapproval has led multiple state treasurers to withdraw state funds from asset managers such as BlackRock, which have pioneered the ESG movement.
As the November midterm elections approach, numerous Republican lawmakers are also becoming more vocal in their opposition to ESG investing. For example, Rep. Jim Banks (R-Ind.) has labeled ESG as a scam.
“ESG is the left’s attempt to abuse our nation’s finances for their own political ends,” Banks told The Epoch Times. “They are prioritizing wokeness over dividends, and millions of American retirees are paying the price.”
Last year, the idea of implementing critical race theory (CRT) curriculum in classrooms across the country sparked a similarly heated debate. Many believe that Republican Glenn Youngkin’s victory in the Virginia governor’s race in 2021 was largely due to his efforts to fight CRT and racial education in schools.
So can ESG help Republicans in the upcoming election in the same way that CRT did?
Amy Walter, publisher and editor-in-chief of the Cook Political Report, says that hot-button issues such as ESG could sway swing voters.
Speaking at the annual membership meeting of the Institute of International Finance (IIF) on Oct. 10, Walter said some voters feel that “when Democrats get in charge,“ they tend to impose “these restrictions” or “their worldview” that are out of touch with the reality.
“I don’t know that [ESG] is really permeating quite yet into ... our average voter conversation,” she said, noting, however, that issues such as CRT and ESG “do motivate a certain type of voter—a type of voter who already feels like the Democratic Party is out of touch and has lost its way.”
That’s where Democrats get into trouble, particularly with swing voters, according to Walter.
“It’s when those voters think that Democrats are spending way too much time on their own sort of partisan agenda and not enough time on bread-and-butter issues,” she said.
Few Investors Understand ESG
ESG funds seek to invest in companies that adhere to environmental, social, and governance principles. This entails taking measures to reduce pollution and carbon emissions. It also means having a diverse and inclusive workforce, from entry-level employees to the board of directors. ESG requires businesses to promote ethical and socially conscious themes such as social justice and racial and gender equity.“The facts are not important with some subgroups in this country,” Fink told attendees. “I’m now being attacked equally by the left and the right, so I’m doing something right.”
Matthew Peterson, cofounder of New Founding, which fights against “woke” corporations and investment funds, believes that people are awakening to the “radical” aspects of ESG.
“There’s more awareness than there has been in the past,” Peterson told The Epoch Times.
“It’s really insidious when you think about the way that they’re doing this. Because they’re hijacking the consumers’ savings and investments and using them to push their political project, reward their friends, and punish their enemies. And it’s hidden, it’s camouflaged by these boring words.”
Cook Political Report expects Republicans to take the House majority in November, grabbing 10 to 20 seats. There’ll be roughly 40 seats “that will determine control of the United States Congress out of 435,” Walter said.
However, the race for the Senate is significantly closer. She says that the outcome is more likely to be 50/50 or for Republicans to gain a seat.
Real Clear Politics predicts similar outcomes for the House and Senate. But according to FiveThirtyEight, while Republicans are favored to win the House, Democrats have a slight edge in the Senate.
