Newsline

Newsline , Society

Anti-ESG Crusader: Fight Corporate Wokeism With Litigation and Legislation

Posted on Monday, June 12, 2023
|
by Aaron Flanigan
|
0 Comments
|
Print

AMAC Exclusive – By Aaron Flanigan

Wokeism

With the left’s monthlong celebration of “pride” now well underway, corporations are once again brandishing their logos, social media pages, and advertising materials with the “pride” movement’s signature rainbow symbol. But after months of mounting conservative backlash to corporate wokeism, this year’s “pride month” is noticeably different—and the risk of boycotts, and even lawsuits, against left-wing corporations is higher than ever.

Despite conservatives’ intense resistance to corporate wokeism, most businesses have continued to beat the drum of leftism—and in some cases, they have doubled down on their support of progressive causes.

But according to a report released last month by the Committee to Unleash Prosperity, which examined the practices of several large investment banks, putting politics over profits may amount to a breach of companies’ legally-binding fiduciary duty to “earn the highest return possible for the tens of millions of retirees and other American savers.”

“Through a process known as proxy voting,” the report states, “these investment houses are supporting a leftist political agenda [that] goes by the acronym ‘ESG,’ which stands for ‘environment,’ ‘social,’ (also known as ‘social justice’) and ‘governance.’ It often encompasses other left-leaning priorities related to race, sex, and ethnicity. When these investment firms prioritize their political biases over company performance, their clients pay the price, in the form of lower shareholder returns that can easily add up to tens of thousands of dollars in losses per client.”

Of course, common sense would dictate that every company has a duty to maximize profit and increase shareholder value rather than giving hordes of money to left-wing political causes. As such, the findings in this report should be of grave concern to shareholders and others with a vested interest in companies’ profit maximization.

What, then, can Americans do to ensure companies are not breaching their fiduciary duty in the name of wokeism?

In an interview with AMAC Newsline, Andy Puzder, a senior fellow at the Heritage Foundation and President Trump’s first nominee for Secretary of Labor, said that legislation and litigation are the answers. Puzder is a member of a coalition of individuals and organizations that have been leading the effort to crack down on ESG investing.

Over the last year alone, 10 red states (including Utah, Kentucky, West Virginia, Arkansas, Montana, and Florida) have passed or introduced legislation that prohibits the consideration of social causes in corporate investment strategies and allows states to take back proxy voting authority from asset managers. Puzder says that number could soon reach as high as 25.

“For a year, I can’t think of a political movement that’s seeing that kind of legislative reception,” he said, noting that some states’ legislative packages have been stronger than others. Puzder pointed specifically to two pieces of anti-ESG legislation—the American Legislative Exchange Council’s State Government Employee Retirement Protection Act and the Heritage Foundation’s State Pension Fiduciary Duty Act—that have been models for state-level legislative initiatives over the last year.

On the legal front, Puzder noted that a good example of litigation pushing back on the ESG movement was Secretary of Labor Eugene Scalia’s May lawsuit against pension funds in New York for their failure to invest in fossil fuel companies based on ESG criteria—even though the vast majority of top performing companies in 2022 were energy companies.

Several state attorneys general have also joined in on the action: last month, a group of Republican attorneys general filed a motion to prevent BlackRock from imposing ESG criteria on utility companies. And in February, 25 attorneys general sued the Biden Labor Department for enforcing a rule that “gives retirement plan sponsors more freedom to consider environmental, social and governance factors when selecting investments.”

Puzder observed that companies are also reacting to backlash from consumers—particularly Bud Light, which has suffered unprecedented boycotts as a result of its decision to promote transgender activist Dylan Mulvaney on one of its commemorative cans. Similarly, in early June, JPMorgan downgraded Target’s stock following “concerns” of Target’s selling of “pride”-themed merchandise.

Americans can also rely on resources from organizations like the Committee to Unleash Prosperity, the Claremont Institute, and the 1792 Exchange, each of which have released studies or databases meant to serve as corporate wokeism watchdogs.

Puzder also said it’s vital for shareholders to talk with their investment advisors. “If you’re investing in the market and you’re using an investment advisor, I think it’s extremely important that you make sure your investment advisor knows” that you don’t want anyone who might vote in support of left-wing causes inconsistent with the shareholder’s values or otherwise detrimental to “the economic interests of the company” to be selected to a company’s board or other top positions.

“I think you are starting to see people react in a very broad way to ESG and woke investing,” he said. “A good lesson for the CEO of any company is don’t offend half your target market.”

Opposition to corporate leftism is not limited to the United States. Earlier this spring, Bloomberg reported, “the world’s biggest climate coalition for insurers [held] emergency talks after a wave of defections revealed the extent to which anti-ESG rhetoric in the U.S. is unsettling members.” For instance, Munich Re, the world’s largest reinsurer, recently withdrew from Net Zero Insurance Alliance—signaling that even European companies are becoming aware of the dangers of elevating progressive values over their duties to members and shareholders.

If conservatives remain focused on attacking ESG ideology and actively avoiding companies that embrace leftist values, this trend seems poised to accelerate.

“I think we need to make it clear,” Puzder concluded, “that there is a cost to promoting these far-left, socialist, Marxist ideologies, and [to] using the American private sector as a shortcut around the ballot box and our free market economy.”

Aaron Flanigan is the pen name of a writer in Washington, D.C.

We hope you've enjoyed this article. While you're here, we have a small favor to ask...

The AMAC Action Logo

Support AMAC Action. Our 501 (C)(4) advances initiatives on Capitol Hill, in the state legislatures, and at the local level to protect American values, free speech, the exercise of religion, equality of opportunity, sanctity of life, and the rule of law.

Donate Now
Share this article:
Subscribe
Notify of
guest
0 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
Governor Tim Walz giving a speech at a Podium in September 2024
Fema.gov Disasters USA Government home page under magnifying glass.
Medicaid text sign on calculator with pills and money. Medicaid text calculatoron American paper money with pills and orange prescription bottle

Stay informed! Subscribe to our Daily Newsletter.

"*" indicates required fields

0
Would love your thoughts, please comment.x
()
x

Subscribe to AMAC Daily News and Games