An obscure movement to push corporate America to the left could play a major role in the 2024 presidential campaign.
President Joe Biden’s first veto was in defense of a rule allowing pension fund managers to make investment decisions based on factors many consider to be “woke.”
ESG: WHAT IT IS AND HOW IT AFFECTS YOU, EVEN IF YOU DON’T REALIZE IT
The top two Republican candidates to unseat Biden, former President Donald Trump and Gov. Ron DeSantis (R-FL), have taken a hard line against this new trend.
Environmental, social, and corporate governance, or ESG, is a model for allowing climate change and liberal social goals to be priorities alongside, and often greater than, maximizing profit.
Republicans in Congress, with the help of Sens. Joe Manchin (D-WV) and Jon Tester (D-MT), two of the most endangered Democratic Senate incumbents, passed a resolution overturning a pro-ESG Biden Labor Department rule.
Biden didn’t exactly defend his veto on the basis of ideological goals but rather pragmatic financial ones. “I just signed this veto because the legislation passed by the Congress would put at risk the retirement savings of individuals across the country,” he said in a video posted on Twitter.
For Trump and DeSantis, however, fighting ESG has become a big part of the broader battle against “woke” capitalism.
“In Florida and across the nation, we’ve heard from law-abiding small business owners and consumers who’ve been denied access to financial services because of where they work or what they believe in,” DeSantis said after signing an anti-ESG bill of his own. “Through this legislation, Florida will continue to lead the nation against big banks and corporate activists who’ve colluded to inject ‘woke’ ideology into the global marketplace, regardless of the financial interests of beneficiaries.”
“Florida will not bow down to the political virtue signaling of martini millionaires,” House Speaker Paul Renner, a Republican, said in a statement at the time. “Corporations have no right to bypass our democratic process. Companies that engage in ESG hurt their customers and the communities they serve, including Florida’s retirees, by making everything they produce more expensive. ESG undermines our national security and bypasses our democratic process. I applaud Governor DeSantis for standing up to corporate titans who believe they are a law unto themselves and protecting Florida’s hardworking families.”
DeSantis made ESG a big piece of his 2024 presidential announcement.
“I think this whole ESG movement is really trying to do through the financial sector what they could never achieve through the ballot box. … We will not be a free society if major financial institutions can do through the economy what people could not achieve through the ballot box.”
But the Trump administration moved against ESG first, trying to keep pension plan administrators from making such offerings default options. “When investments are made to further a particular environmental or social cause, returns unsurprisingly suffer,” then-Labor Secretary Eugene Scalia wrote in the Wall Street Journal at the time.
In a 2024 campaign video, Trump blasted ESG as Wall Street “radical-left garbage.” He pledged “to support a law to keep politics away from Americans’ retirement accounts forever.”
Entrepreneur Vivek Ramaswamy, a lower-tier Republican presidential candidate, has also made opposition to ESG a core part of his platform. Former Vice President Mike Pence is expected to rail against corporate social engineering, suggesting this is becoming GOP orthodoxy.
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There is a broader concern about conservatives losing access to financial markets and other institutions as ideology plays a larger role in corporate governance.
“It’s a huge issue,” a top conservative operative told the Washington Examiner. “I’m just not sure it’s an accessible one for someone trying to break through in a primary.”
