Republican governors are promising to fight back after President Joe Biden signaled he would veto Congress’s resolution disapproving of a rule that allows retirement fund managers to consider environmental, social, and corporate governance (ESG) factors.
Nineteen, including Florida’s Ron DeSantis and New Hampshire’s Chris Sununu, asserted in a Thursday letter that Biden is putting his political agenda above the wellbeing and individual freedoms of hardworking Americans.
Earlier this month, a bipartisan Senate coalition joined the House in disapproving of a Labor Department rule that allows ESG factors to be considered when decisions are made on behalf of retirees. Factors like profitability and returns are necessarily deprioritized, the governors argue.
“We as freedom loving states can work together and leverage our state pension funds to force change in how major asset managers invest the money of hardworking Americans, ensuring corporations are focused on maximizing shareholder value, rather than the proliferation of woke ideology,” the governors wrote.
“The proliferation of ESG throughout America is a direct threat to the American economy, individual economic freedom, and our way of life, putting investment decisions in the hands of the woke mob to bypass the ballot box and inject political ideology into investment decisions, corporate governance, and the everyday economy,” they continued, lamenting the already diminished returns retirees are experiencing.
The governors will pursue various strategies. They may consider banning ESG outright at the state and local level. Additionally, they may eliminate the “consideration of ESG factors by state and local governments when issuing bonds or [prohibit] state fund managers from considering ESG factors when investing taxpayer money.”
DeSantis and company are also very concerned about the financial sector in their states considering so-called “Social Credit Scores” in banking and lending practices, which they claim would prevent citizens from obtaining financial services like loans, lines of credit, and bank accounts. The governors are mulling a ban on this, which may also include “stopping financial institutions from discriminating against customers for their religious, political, or social beliefs, such as owning a firearm, securing the border, or increasing our energy independence.”
Other governors who signed the letter include Arkansas governor Sarah Sanders, West Virginia governor Jim Justice, and Georgia governor Brian Kemp.
CEO of State Financial Officers Foundation Derek Kreifels, whose group has been at the forefront of efforts against ESG on the state level, told National Review that this is a welcome and needed move.
“I applaud the work of these 19 GOP governors, who are working together to put a stop to the investment sham known as ESG. Too many Americans across the country are seeing their hard-earned retirement and pension dollars being used to further political agendas, and these governors are standing up to protect their constituents’ investments,” Kreifels said.
Meanwhile, mention of ESG was conspicuously missing from Blackrock chairman Larry Fink’s annual letter to investors out Wednesday. It’s been replaced by the word “choice,” as pointed out by Axios.
“We have clients who want to invest in ways that seek to align with a particular transition path or to accelerate that transition. We have clients who choose not to. We offer choice to help clients reach their investment goals, and we manage their assets consistent with their objectives and guidelines,” Fink wrote.
Fink, whose 2020 letter to investors was titled “Sustainability as BlackRock’s New Standard for Investing,” is now backtracking, saying the investment company is not “the environmental police.”
“It is for governments to make policy and enact legislation, and not for companies, including asset managers, to be the environmental police,” Fink wrote in the 2023 letter.
Will Hild, executive director of Consumers’ Research, another group fighting ESG, told National Review that Fink’s letter marks a victory for groups like his.
“After mounting political pressure from both the state and federal levels and our campaigns exposing BlackRock, the company’s CEO Larry Fink didn’t make a single mention of ESG in his annual letter which is traditionally reserved to push his progressive agenda,” Hild explained.
“This fight is far from over, but BlackRock is feeling the heat and strong leadership, like we saw today from the 19 governors, is making a difference,” he added.