All of the recent pushback against ESG has finally prompted the sustainable investing world to mount a response – one that is increasingly organized, and, it seems, well-funded.
Call it the anti-anti-ESG movement.
This week a group of communications strategists announced what they say is a $10-million-plus campaign “to protect the right to engage in responsible investment” and “to strike back against well-funded attacks targeting American businesses, investors, and consumers engaging in the practice.”
That effort, called Unlocking America’s Future, “will highlight the economic harm posed to workers, families, businesses, and the environment by these coordinated attacks, and show how pro-responsible investment policies put more money in consumers’ pockets, boost America’s competitiveness with China, and protect clean air and drinking water for all Americans.” It is unclear where the initiative's funding will come from. Although it issued an announcement Monday, its members did not make themselves available for comment.
The campaign follows the recent debut of another, Investing for the Future, a separate progressive effort funded by the Americans for Financial Reform Education Fund and Take on Wall Street. That initiative’s site, ESG Explainer, includes overviews of ESG and the anti-ESG movement and has form letters that visitors can send their representatives in Congress.
Those campaigns come amid a record year for political pushback on sustainable investing.
There was a total of more than 150 anti-ESG bills and resolutions introduced across 37 states this year, according to a report last week from law firm Simpson Thacher. Like most pieces of legislation in general, anti-ESG bills largely failed to get signed into law, but since 2021 at least 40 laws have been put on the books in a total of 18 states, the firm noted. Behind much of that are model bills drafted by conservative groups such as the American Legislative Council and the Heritage Foundation, according to the report.
Generally, politicians have objected to the considerations of environmental, social or governance criteria in public investments, most often state government pension plans. Investments that use those factors have underperformed, critics have alleged, although evidence is lacking that ESG criteria is linked with lower investment returns over long timeframes. Opponents have also accused financial institutions, including the biggest investors in the oil and gas sector, of boycotting fossil fuel companies.
Asset managers, including those that favor sustainable investment and those that merely consider ESG factors alongside myriad others, have emphasized that the criteria are used to help assess financial risks and opportunities.
“The anti-ESG movement certainly has given us a chance to explain what sustainable investing is and when people learn more about it, they like it,” said Bryan McGannon, managing director at US SIF: The Sustainable Investment Forum, in an email. Last year, US SIF launched its own site, ESG Truths, to combat anti-ESG messaging.
McGannon also pointed to a report last week from progressive group Public Citizen showing that anti-ESG efforts are unpopular with voters across parties.
Among 1,000 people surveyed in November by Lake Research Partners, 56% said they would oppose laws to limit the types of information that public companies disclose to investors, including pension funds and asset managers. While some had no opinion on the topic, 30% would favor such limits, including 34% of Republicans, Public Citizen stated.
Overall, more than half of people said they want companies to disclose information about forced labor, product-safety violations, worker safety, lobbying, gender discrimination and pay equity, according to the report.
In July, House Republicans dedicated the month to ESG, with a volley of hearings and bills on the subject. The House Judiciary Committee has also been ordering asset managers and sustainable investment groups to testify, sending subpoenas to Vanguard, Arjuna Capital and As You Sow.
Meanwhile, regulators have forged ahead with new rules around ESG criteria. In September, the Securities and Exchange Commission voted to approve an update to a rule around fund naming that would help curb greenwashing by products that use terms like ESG in their titles. However, the SEC has delayed a final version of a more consequential rule it proposed in 2022 that would require many public companies to disclose greenhouse gas emissions and other data.
But on that topic, the State of California essentially intervened, passing its own law to require large companies – public or private – that do business in the state to start reporting emissions data in 2026.
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