Rep. Jim Himes (D-CT) likened the Republican party’s attempts to challenge corporate America’s environmental, social and governance (ESG) initiatives to a “Taliban-like attack on the private sector,” in an interview with Politico. His commentary comes amid a growing partisan divide over the role of ESG principles in corporate decision-making and investment strategies.
Himes criticized the Republicans for what he perceives as an abandonment of free-market principles: “The party formerly of free markets has decided that they will use the power of government to pound on Disney, to pound on banks that … won’t invest in the carbon industry,” he said. He views the Democratic party as defending the free markets against these attacks.
The GOP’s pushback has been characterized by efforts from figures such as Rep. Bill Huizenga (R-MI), chairman of the House Financial Services Subcommittee on Oversight and Investigations. Huizenga recently sent letters to some of the country’s largest asset management firms, including BlackRock, Vanguard, State Street, and JP Morgan. His correspondence sought clarity on how these companies reconcile their ESG commitments with the fiduciary responsibilities they owe to their investors.
BlackRock’s CEO, Larry Fink, responded to the GOP criticisms by emphasizing a moderate stance on ESG. He stated that his company only adopts ESG initiatives when specifically requested by their clients, thus aiming to distance his firm from any suggestion of forcing a political agenda onto investors.
These debates over ESG come in the wake of President Joe Biden’s veto of a Republican-led bill that sought to roll back regulations encouraging private retirement plan fiduciaries to incorporate ESG factors into investment decisions. Despite being a Democrat-led initiative, the veto was not without controversy within Biden’s own party, with Sen. Joe Manchin (D-WV) and Sen. Jon Tester (D-MT) voting in favor of the Republican bill.
Echoing the sentiment of many Republicans, Rep. Andy Barr (R-KY) argued against politicizing Americans’ retirement plans. He said, “Americans don’t want their retirement politicized. They don’t want politics as part of their retirement portfolio.” He added that the present concern for most Americans should be the financial performance of their retirement plans rather than the integration of political or social factors.
First published at Fox Business.
Jack McPherrin ([email protected]) is a managing editor of StoppingSocialism.com, research editor for The Heartland Institute, and a research fellow for Heartland's Socialism Research Center. He holds an MA in International Affairs from Loyola University-Chicago, and a dual BA in Economics and History from Boston College.
