The “Pro-ESG” Empire Strikes Back

April 28, 2023

Senior finance officials from 18 states, as well as hundreds of investors, public and private companies and climate-focused nonprofits, joined together to urge policymakers to reject efforts by certain, primarily Republican state and federal legislators to preclude consideration of ESG factors in investment or company decision-making. Led by the financial industry climate group Ceres, the signatories to the investor/company letter state that they “remain wholly committed to sustainability and addressing the financial impacts of climate change because we factor relevant considerations in our business, investment, and risk management decisions that have a material impact on our own operations and investments.” They add that “climate change poses a threat to the safety of our communities and the long-term value creation of the economy, and addressing its risks upholds investors’ fiduciary duty.” Taking on directly the “anti-ESG” side of the discussion, the signatories write that “our consideration of material environmental, social, and governance (ESG) factors is not political or ideological. Incorporating these issues into financial decision-making represents good corporate governance, prudent risk management, and smart investment practice consistent with fiduciary duty. We factor financially material considerations, including the impacts of climate change, into our standard investment and risk management decisions, in order to protect our operations and our investments.”

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