On Tuesday, the House Oversight Committee convened a hearing on environmental, social, and governance, or ESG, investing criteria. For over a year now, Republicans have been trying to turn this obscure three-letter acronym into a full-fledged culture war. So far, the right has expressed its complaints about ESG via a word salad whose components don’t share much of a relationship either to reality or one another. This pattern persisted on Tuesday, when the word “cabal” was used at least three times in reference to allegedly “woke” investors.
ESG criteria, in reality, refer to the broad set of data that investors look at to determine a company’s impact on the world and the impact the world might have on it. In other words, it’s not just about whether a company is “good” according to some abstract set of values. It represents another way of factoring risk exposure into investment—something financiers have been doing for centuries.
The two witnesses Republicans summoned to this week’s committee hearing weren’t economists or investment professionals, who might be familiar with these criteria or risk assessment in general, but attorneys general from Utah and Alabama, respectively: Sean Reyes and Steve Marshall. Whatever ESG actually means, to them and other anti-ESG crusaders, is mostly irrelevant. For those trying to understand their crusade, the hearing showed that it’s best to think of ESG as a canvas onto which the right projects its own plans and anxieties.
If you’ve heard of Marshall, it may well be because he’s spent considerable time since 2020 trying to overturn the results of that year’s presidential election, and shield other Republicans from accountability for spreading lies about it. Both he and Marshall joined fellow red states attorneys general in filing a brief with the Supreme Court supporting Trump’s claims about election fraud. Marshall, for his part, was serving as head of the Rule of Law Defense Fund that year, which sent out robocalls encouraging Trump supporters to flock to the Capitol on January 6. RLDF—whose donors include the Edison Electric Institution and the Judicial Crisis Network—is also a sister organization of the Republican Attorneys General Association, or RAGA, which Marshall was appointed chair of after continuing to deny, in 2022, that Joe Biden won the 2020 election.
Generous RAGA donors have included Koch Industries, Chevron, Exxon, Fox, and TikTok. ProPublica recently reported that companies that initially withdrew funds from RAGA over its role in the January 6 attack are back, including Amazon, Walmart, and JPMorgan Chase’s PAC. Overall, RAGA revenues jumped 68 percent in 2022.
In his testimony, Marshall—who chairs a secretive organization pushing a clandestine political agenda through undemocratic means—accused a “cabal of global elites” of being “clearly connected through various alliances” to try to force an ESG agenda onto an unwilling public. Reyes similarly accused “woke investors” like Blackrock of being part of an “organized syndicate of pressure” that is engaged in an “open conspiracy to bypass Congress.” Answering big policy questions like decarbonization, he argued, “is the role of the people’s elected representatives in a democracy—including each of you in Congress, state elected officials, and local leaders—not unelected bureaucrats or foreign governments.”
In other words, someone who’s spent the last several years attempting to overturn the results of a democratic election took to the Capitol on Tuesday to accuse an ill-defined set of actors of trying to sidestep democracy by asking companies if climate-fueled droughts, floods, and fires (for instance) might have some impact on their operations. And while claiming only to want investors to adhere to fiduciary duty, Republicans failed to mention that much of Wall Street’s wariness around investing in new fossil fuel production has nothing to do with a “woke” agenda: Before the pandemic, energy companies on the S&P 500 were underperforming every other sector on that index, and had spent a decade lagging behind as they binged cash on rapid drilling through the shale boom. Its fortunes have changed in recent years, but investors and oil and gas industry managers themselves are urging modesty on exploration and production precisely so that they can make more money.
“Elites from around the globe have formed alliances to coordinate together to implement woke climate policy,” Marshall said in his opening statement. “These schemes undermine our system of government because unelected elites are making policy decisions outside of democratic processes.” The footnote on that sentence in his pre-written testimony references Consumers Research, which is funded by millions of dollars in undisclosed donations and advised by right-wing legal guru Leonard Leo.
Republicans on the committee responded enthusiastically to this opening salvo. Wisconsin Republican Glenn Grothman asked Marshall whether “ESG” might influence decisions over who companies hire or put on corporate boards. “Right now there’s certain disfavored groups in our society,” Grothman mused. “People don’t like men. People don’t like people with a European background, that sort of thing. Could this be something where you’re encouraging businesses not to hire or promote people from certain unfavored groups.” In a moment dripping with irony, Texas Representative Pete Sessions decried “activist government making decisions on behalf of free people” in service of his larger point, supporting efforts to limit financial institutions’ decision-making power—and even what kind of data can be made available to them—in order to curb the spread of ESG.
It would be a fool’s errand to try to find much coherence in the right’s screeds against supposedly woke investors—who don’t really seem to exist. But today’s Oversight hearing might have accidentally illustrated a good rule of thumb: Whatever Republicans accuse the “ESG movement” of doing is something they’re probably already doing themselves.