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State attorneys general continue the pushback against ESG (2023)
| Environmental, social, and corporate governance |
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| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
Bloomberg Law argued on February 13 that state attorneys general are the new players in the state-level pushback against ESG after state financial officers (like treasurers and auditors) dominated most of the state-level pushback in 2022:
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New state attorneys general have quickly found themselves in the ESG wars, with many officials deploying their broad investigative and enforcement powers just weeks on the job. New Republican attorneys general in Iowa, Arkansas and several other states already are challenging environmental, social and governance investing with a lawsuit against the Labor Department and a letter that assailed proxy advisory firms Institutional Shareholder Services Inc. and Glass, Lewis & Co., among other actions. On the Democratic side, Arizona’s new attorney general, Kris Mayes said Monday her state would exit ESG investigations into big banks and other financial firms that her Republican predecessor probed. The speed in which new Republican attorneys general have jumped on ESG isn’t surprising given how public and polarizing the topic has become, said Jason Downs, a co-chair of the state attorneys general and ESG groups at Brownstein Hyatt Farber Schreck LLP. Attorneys general can fight ESG in ways that even a House with a new Republican majority can’t, he said. “State attorneys general hold the most power because of their enforcement authority,” Downs said. Republicans have repeatedly warned the Securities and Exchange Commission, asset manager BlackRock Inc. and others that their ESG investing policies and rules may violate state and federal laws. ESG is a top-of-mind issue for Republican attorneys general when they talk, said Iowa Attorney General Brenna Bird, who ousted a Democratic incumbent…. In January, Republican attorneys general from 21 states challenged Glass Lewis and ISS over the firms’ voting advice to shareholders considering proposals on climate change, board diversity and other ESG issues at companies’ annual meetings. The letter says the firms’ recommendations aren’t material to investors and “may threaten the economic value” of their states’ investments and pensions. Both firms have disputed the claims from the attorneys general. Arkansas’ Tim Griffin was among the six new attorneys general who signed the letter. It went out a week after Griffin became attorney general. ESG awareness is growing among his constituents, who are worried, Griffin told Bloomberg Law. ESG can hinder a company’s ability to operate efficiently and innovate, he said. “I’ve heard all the arguments about, well, no, this is another way to reach value, right? This is another way of viewing value as opposed to ‘values,’” Griffin said. “I don’t buy it.” Republican attorneys general teamed up again on a lawsuit to block a Labor Department retirement investment rule that enables private-sector employers to consider ESG factors when choosing pension investments. The lawsuit, filed in the US District Court for the Northern District of Texas in January, alleges that the rule prioritizes “ill-defined” ESG concepts. A senior Labor Department official said the rule isn’t an investment mandate and only was intended to clarify that ESG factors were as important as any other material risk-return consideration, but not more so.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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