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Republicans Go to War Against Environmentally & Socially Responsible ESG Companies

For generations, corporations have been criticized for their sole focus on profits, without regard to the welfare of their employees or the global environment. Slowly, many companies have made progress in implementing strategies to address such complaints. Such policies, known collectively as ESG [environmental, social, and governance], are a set of standards that include reducing carbon emissions, ending sweatshop labor, paying a living wage, ending employment discrimination, allowing employees work-at-home flexibility to address child care issues, and efforts to recruit women and minorities to serve on their board of directors.

Investors can reward such strategies by buying shares of such companies and not just because they support progressive policies. The heart of ESG investing is that companies are more likely to succeed in today's competitive global environment if they create value for all their stakeholders including employees, customers, and society-at-large including the environment.

Many Republicans now refer to ESG principles as "woke capitalism" because they don't align with their political ideology, and argue that policies to address issues like climate change, deforestation, and workplace discrimination don't maximize shareholder value. And, they are now looking for ways to undermine progressive corporate policies and ESG investment.

Slate: "Republicans are now striking back, which is why you hear more of them railing against “woke capitalism” and ESG. ... Another recent anti-ESG initiative has been to push red states to pass legislation to divest state pension fund assets from firms who follow ESG principles."

Many Republicans have now turned against the US Chamber of Commerce, a long-term political ally, which, they argue, has been corrupted by progressive capitalists.

The Intercept: "The Chamber has infuriated Republicans by endorsing ESG criteria. “Today, for many companies, climate change and carbon emissions impact long-term value, thereby becoming a factor that retirement fund managers should take into consideration,” wrote a Chamber vice president in a typical statement in July 2020."
Political Wire: “Republicans plan to launch a variety of investigations into the U.S. Chamber of Commerce and many of its largest member corporations if they retake the majority in the House of Representatives this November,” The Intercept reports.
“The probes, said a GOP member of Congress and multiple Republican operatives who requested anonymity to discuss plans that have yet to be made public, will marry Republicans’ newly formed hostility to the Chamber with the party’s mission to undermine the growth of the ESG investment sector.”

The problem with the GOP's war on ESG and ESG investing is that it misses the point; such strategies are good for business, and thus shareholders. The research firm McKinsey and Company reviewed more than 2000 studies on the impact of ESG strategies on the performance of corporations and found that they "facilitated top-line growth, reduced costs, minimized regulatory and legal interventions, increased employee productivity, and optimized investment and capital expenditures."

Moreover, numerous studies have demonstrated that employees, especially younger staff members, want to work for sustainable companies that reflect their progressive values. In an age in which corporations are increasingly having to compete for the best and brightest, pro-ESG firms have a critical advantage. And, because of information technology and social media, customers and investors are armed with the knowledge they need to reward companies that treat their employees fairly and protect the natural environment.

ESG policies aren't a drain on business; they are the future of capitalism and capital investing.

#business #politics #culture

By: Don Lam & Curated Content

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