Georgia banned abortions in 2019 after fetal heartbeat detection was detected. The CEOs of Warner Media, Disney and Netflix declared that they would stop all film production in Georgia if Governor Brian Kemp signed it into effect. A month later, 187 CEOs published a full page advertisement in The New York Times expressing their opposition to this and other anti-abortion legislation in various states.
They wrote that restricting access to comprehensive reproductive health care, including abortions, “threatens the health independence and economic stability our employees and customers.” It is against our values and bad for business.
Corporations are increasingly unable to see the connection between their “values”, and their bottom line. The ESG movement is centered on the marriage of progressive politics and the profit motive. ESG seeks to harness corporate power for progressive ends. It rates firms on compliance with ideological criteria, and makes investment decisions accordingly.
ESG is built on a feedback loop. ESG allows corporations to consider it sound policy for them to avoid fossil fuels. This is because progressive legislators have stated that they want to eliminate the fossil fuel industry. Progressives may regulate or disgrace their opponents and corporations will include those regulatory or reputational risks in their investment decisions.
Investment firms and corporations are bullied by consulting groups to make sure they have progressive policies. Malk Partners advises more than 500 billion dollars in corporations on ESG-related matters. suggested that clients provide “coverage [for out-of-state] abortion expenses” to help “prevent unwanted attrition” and “improve their competitive position.” PSECU financial instructs clients on how to document their DEI efforts and increase their ESG scores.
ESG has been an integral part of the progressive movement’s cultural progress over the past decade. Joe Biden’s first veto was signed at noon Monday and blocked a congressional override of his Department of Labor’s pro-ESG policies.
In 2021, the executive order that Congress overturned was originally issued. Biden ordered his secretary of Labor “identify agency actions that could protect the life savings, pensions, and other assets of United States workers from the threats to climate-related financial risks” rel=”noreferrer noopener” target=”_blank”>executive order in 2021. Biden directed his secretary of Labor to reconsider Trump’s guidance, which prohibited employers from considering ESG criteria when investing in employees’ pension funds.
In November, the Department of Labor published a proposal rule to repeal Trump’s guidance that required employers and fiduciaries make investment decisions solely based on “pecuniary factor”. It also proposed to repeal Trump’s guidance prohibiting proxies (the representatives of shareholders at annual corporate meeting) from “subordinating” the interests of participants and beneficiaries in retirement income to “unrelated objectives” like ESG.
Because proxy advisory groups represent large numbers small shareholders, they are integral to the ESG movement. They often decline to attend corporate meetings. Stephen Soukup writes The Distortion of Woke Capital that proxy advisory groups have led to a shift in corporate policy. They advise institutional investors and their proxy on pending votes at meetings.
Corporate managers may learn that one or both the dominant proxy services supports a proposal. They often try to prevent the vote by negotiating ….. According to law, shareholders who propose proposals are prohibited from campaigning for them. This would be considered solicitation. This anti-solicitation provision has been rendered moot by the emergence of conflicted, large-used proxy advisors.
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The rise of ESG rating agencies and the capture of proxy advisory group have combined to starve the fossil fuel industry capital. This has prompted corporations across the nation to invest more in diversity, equity and inclusion initiatives to show their ESG bona fides.
Trump wanted to prohibit proxy weighing ESG criteria. However, the proposed rule by the Biden Department of Labor would reverse that ban. The Senate and House, led by Senators Mike Braun, John Kennedy and John Kennedy, passed a Congressional Review Act resolution that overroded the department’s guidance. This would have reverted to the status quo ante, requiring investors to decide on financial performance and not ESG criteria. Joe Manchin (Senate Democratic) and Jon Tester (Republican) joined their Republican counterparts in passing the bill to the upper chamber.
In a divided House and Senate, Biden’s veto over the CRA resolution will not be overturned. Nineteen state governors, including Florida Governor Ron DeSantis have made promises to their pension funds in response to the veto. Both the efforts of these governors and the president’s veto show that both sides are aware of ESG’s role as Corporate America moves leftward. Although Corporate America doesn’t make laws, its investment, production and hiring decisions have a significant impact on workplaces, markets and culture. It’s currently devoted to supporting vice and starving virtue through the ESG movement.
