The Environment, Social and Governance (ESG) movement has taken center stage as our nation deals with many pressing issues, from climate change and social inequality to economic challenges. Because of these challenges, there has been growing demand from consumers, investors, employees, and stakeholders alike, when it comes to advancing ESG-related practices.
Along with a strong demand for ESG disclosures among consumers, investors, and policymakers, several ESG reporting policies have been implemented on both the state and federal levels over the past several years. But now there is a growing rise in pushback against ESG.
A rise in the anti “woke” movement, supported strongly by many in the Republican party, has led to support for curbing these reporting standards on both the state and federal levels.
Just last week, President Biden used his first veto to block a bill passed by Congress that would have repealed a new Department of Labor rule, which took effect in January, allowing retirement fund managers to consider ESG in their investment decisions. The House failed to override the President’s veto.
The anti-ESG debate is also playing out in the states. Over the past two years, at least seven states have implemented anti-ESG laws, according to The Associated Press. And that number is expected to continue to grow as other states consider anti-ESG proposals.
Just this month, Florida Governor Ron DeSantis announced an alliance comprised of 18 states – all Republicans – that formed to push back against President Biden’s ESG agenda. The state alliance’s goal is to “lead state-level efforts to protect individuals from the ESG movement.”
The debate over ESG, which has now become a divided partisan issue, will continue to play out in the halls of Congress and across state legislatures.