Prepare for a New Republican War on “Woke” Capital | The New Republic

Representative Andy Barr, a Kentucky Republican, promises that ESG “will be one of the major focuses of oversight of a Republican majority” on the House Financial Services Committee. He’s probably right (though it should be noted that Barr is not ranking on the committee and that the next chairman will likely be North Carolina Republican Patrick Henry). In anticipation, reports the Financial Times, “Lawyers for financial institutions and technology companies have been training executives in recent weeks on how to respond in a televised grilling from politicians.”

Note that the FT did not say the lawyers were training executives to alter their ESG policies. There’s no law Congress could pass to tell investors how to spend their money, and if there were, President Joe Biden would veto it.

It’s different at the state level, where Governor Ron DeSantis, who calls ESG funds “corporate cartel elites” that commit “financial fraud,” withdrew a tax break from Disney after it voiced opposition to his law restricting classroom discussion of LGBTQ issues. He also barred state pension fund managers from following ESG principles.Such maneuvers are all but impossible to commit at the national level because Congress can’t use tax laws to punish individual companies and does not manage any pension funds.

A new “anti-woke” lobby group, the American Free Enterprise Chamber of Commerce, was formed last spring to compete with the U.S. Chamber of Commerce. But House Speaker-in-waiting Kevin McCarthy said he has no interest in meeting with the new group, because the U.S. Chamber of Commerce still calls the shots on business interests, not the House Republican majority. (Axios reported that McCarthy is trying to get Chamber CEO Suzanne Clark fired. I bet that won’t happen either.)

The ESG movement provides an interesting window on how corporations have changed over the past half-century. Fifty years ago, anybody who wanted to change corporate behavior would have had to pitch their ideas to the corporate chairman. That’s because in those days corporations were able to govern themselves with little concern about what their stockholders wanted. They were also much less beholden to the banks because they tended to maintain large cash reserves with which to make investments…It’s a poor substitute for the old model and an even poorer substitute for government regulation. But to the small extent ESG has any influence at all, it makes Republicans see red.

Prepare for a New Republican War on “Woke” Capital | The New Republic

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