19-state coalition wages war on ESG

Nineteen US states led by Florida Governor Ron DeSantis have formed an alliance to detoxify their states from radical ESG ideology.

Environmental, social and governance (ESG) is a form of grading companies and countries — and soon people, experts warn — based on how well they conform to prevailing narratives on environmental and social issues. For example, the more “environmentally friendly” or “racially inclusive” a company purports to be, the more virtuous it is and thus more worthy of investment. If a company’s ESG score is below certain thresholds, they are not to be invested in at all. 

ESG ideology, which has come to mostly refer to environmentalism and “climate change," dictates that a company’s profits must sometimes take a backseat to saving the weather.

Proponents of ESG include lawmakers, the world’s largest investment firms, and tech giants. BlackRock CEO Larry Fink, who manages $10 trillion in wealth, vowed to “force behaviors” when it comes to ESG.

Recently, Republicans led a considerable effort to block a Biden administration rule to allow retirement plan fiduciaries to make investment decisions based on ESG factors.

Now a large coalition of states are pushing back against the ideology, including Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Vermont, West Virginia, and Wyoming, with Florida at the helm.

“We as freedom loving states can work together and leverage our state pension funds to force change in how major asset managers invest the money of hardworking Americans, ensuring corporations are focused on maximizing shareholder value, rather than the proliferation of woke ideology,” read a joint statement from the states published Thursday. 

“The proliferation of ESG throughout America is a direct threat to the American economy, individual economic freedom, and our way of life, putting investment decisions in the hands of the woke mob to bypass the ballot box and inject political ideology into investment decisions, corporate governance, and the everyday economy.”

The governors listed two major actions they have agreed to take, the first being “blocking the use of ESG in all investment decisions at the state and local level, ensuring that only financial factors are considered to maximize the return on investment, protecting retirees and taxpayers alike.”

The coalition also agreed to block financial institutions from implementing China-style “social credit scores” which would make financial services such as lending contingent on compliance with ESG.

In January, for example, mortgage-lending giant Wells Fargo announced it will only provide new home loans to minorities as the bank prepares to step back from the mortgage market. Whites who are existing Wells Fargo customers will also be eligible for mortgages.  

Also in January, Wells Fargo suddenly closed the account of Brandon Wexler, a well-known gun dealer who had been with the bank for 25 years. The bank suggested it will no longer do business with firearms dealers when it told Wexler it was too “risky,” according to The Reload.

In 2020, Wells Fargo suddenly closed Republican Senate Candidate Lauren Witzke’s bank account without explanation. 

Chase Bank followed Wells Fargo’s decision by closing former Trump National Security Advisor Lt. Gen. Michael Flynn’s bank account in 2021 for “reputational reasons,” according to The Heritage Foundation.   

Bank of America, of its own volition, decided to track its customers who may have been at the Capitol on January 6 and report them to the FBI. Following the Capitol breach, payment processor Stripe stopped processing payments for Trump’s campaign and anyone who was at the Capitol that day.  

In October, Bank of America also shut down the bank account of a popular conservative influencer and refused to provide an explanation. 

Some economists and lawmakers have been warning that banks and financial institutions are becoming the “new legislatures”. 

“They can’t pass the Green New Deal in the United States Congress,” said New Hampshire State Rep. J.D. Bernardy, “but the banks can certainly implement it. The major banks, financial management firms, and insurance companies are de facto deciding how we will be able to live. They are becoming our new legislatures.”    

“I think it is highly likely that within the next two years, you’re going to see financial institutions start to use a personalized social credit score of some kind to make decisions about things like your access to loans, your interest rate, or whether you’re eligible for insurance coverage,” said Heartland Institute Director Justin Haskins, according to an analysis by The Epoch Times. “All the signs are pointing to that happening very soon,” he said. 

American Legislative Exchange Council Chief Economist Jonathan Williams predicts that if enough progressive pressure is brought to bear on the financial system, it would mean “having people’s freedoms eroded without any legislation ever having to be passed, whether it’s companies with a radical take on ESG or FICO personal credit scores.” 

But Ron DeSantis’ newly founded coalition aims to put a stop to that, including “banning the financial sector from considering so called ‘Social Credit Scores’ in banking and lending practices aimed to prevent citizens from obtaining financial services like loans, lines of credit, and bank accounts. 

“This may also include stopping financial institutions from discriminating against customers for their religious, political, or social beliefs, such as owning a firearm, securing the border, or increasing our energy independence.”