March 3, 2023 - 7:00am

Over the last year, Republican criticisms of the ESG (environmental, social and corporate governance) movement have grown fiercer. Deriding it as “woke, a “scam and even “a worldwide human satanic organised effort”, GOP figures have attacked ESG over what they perceive is a front for an increasingly political — namely Left-wing — agenda. 

Now Republicans are waging their anti-ESG offensive at a legislative level — and with some success. As of January 2023, nearly half of all US states either have some kind of anti-ESG restriction or have blacklisted ESG actions, according to an Energy Monitor analysis. In fact, anti-ESG “developments” have rapidly outpaced pro-ESG measures over the past three years, illustrating how this once relatively anonymous campaign is going mainstream.

Although “developments” are rather broad in definition, ranging from strongly worded letters by state legislators to the banning of ESG in legislation, the chart below shows that an anti-ESG backlash appears to be underway. Indeed, anti-ESG developments were virtually non-existent between January 2020 to January 2021, but soon start to rise significantly after January 2022. This was most evident in Republican states.

Total regulatory developments introduced each month. Credit: Energy Monitor

Of the 73 anti-ESG developments since 2020, over half (55%) were directed at the broader ESG spectrum, while a further 29% targeted the energy and climate sector. The remaining 12 developments were aimed at social corporate practices (primarily firearms-related). The success of these measures has, however, been variable: according to Energy Monitor’s analysis, more than 50% of pro- and anti-ESG measures failed or died in committee, while roughly one in three have already passed and one in ten are pending. 

These developments barely constitute a dent in the ESG industry, which is worth $4.5 trillion in the US alone and is expected to double in size by 2026. Nonetheless, the movement is gathering momentum at not just a state level, but at a federal one too. This week, Republicans (and a selection of Democrats) voted to end a controversial rule by the Biden administration that allows retirement funds to consider climate change and other factors when choosing companies to invest in. The White House responded by promising to veto the resolution.

Still, this has not deterred GOP presidential contenders (past and present) from jostling to spearhead the anti-ESG campaign. Reacting to the vote, former vice-president Mike Pence tweeted his “disappointment” that “President Biden is putting ESG and woke policies above hard-working Americans’ retirement accounts!” And last month, Florida governor Ron DeSantis announced legislation “to protect Floridians from the Woke ESG Financial Scam”. There is even an anti-ESG fund manager planning to run in the 2024 Republican primaries.

The ESG fightback may only be in its infancy but, as John Masko notes in UnHerd, it’s a problem that can’t be ignored for much longer.

is UnHerd’s Newsroom editor.