Republican lawmakers in several predominantly red states introduced bills to purge the insurance industry of the ESG movement.
The environmental, social, and governance movement seeks to make organizations consider social and environmental factors when making investments. The movement has come under increasing scrutiny from conservatives, and a growing number of lawmakers have introduced legislation against it.
Lawmakers in red states such as Texas, North Dakota, and South Dakota are now shifting their focus to ESG in the insurance industry, according to Politico.
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Despite conservative criticism, activists claim that in the insurance industry, in particular, ESG calculations are essential.
“ESG is in the DNA of any insurance company,” Michel Leonard, chief economist and data scientist at the Insurance Information Institute, told Politico. “It would be very difficult for the insurance industry to insure in an economically viable and sustainable way without paying attention to environmental patterns.”
Republicans have fired back, saying ESG threatens to wreak havoc upon the whole industry and a lack of legal measures will cause increasing pressure on more and more companies to adopt them.
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“We don’t want to destabilize the entirety of the insurance industry by injecting a bunch of non-actuarially sound principles,” GOP state Rep. Tom Oliverson, vice chairman of the state House’s Republican caucus, said.
Oliverson recently introduced a bill to bar both ESG scores and diversity, equity, and inclusion factors being considered by insurers when setting rates.
