(HBR) In the past year, ESG investing has become caught up in America’s culture wars, as prominent GOP politicians claim that it is a mechanism investors are using to impose a “woke” ideology on companies. Former Vice President Mike Pence has railed against ESG in speeches and in an op-ed. A variety of Republican governors and red-state legislatures are considering executive action and legislation to boycott asset managers that use ESG as a screening tool for their investments. And in Washington, various Congressional committees have pledged to hold hearings in which the Securities and Exchange Commission (SEC) and major asset managers will face public questioning about the legality of ESG investing.
As an attorney who is a lifelong Republican and a business professor who is a lifelong Democrat, we have been dismayed by the politicization of ESG investing, which until recently was a technical (but important) topic that rarely spilled outside of academic and investment communities. The upcoming congressional hearings on ESG present an opportunity to put facts on the record and to begin the process of working toward a bipartisan consensus that will take the political passion out of ESG. Far from enflaming passions, we hope that hearings will make ESG boring again.
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