Democratic Rep. Cori Bush of Missouri claimed on Tuesday that Republicans put “black and brown communities” at risk by opposing the use of environmental, social and governance (ESG) factors in investment decisions.
“We understand that when corporations recklessly pollute our communities or fail to consider how the climate crisis will harm people on the front lines, someone pays the price,” Bush said during a hearing held by the House Oversight Committee’s Subcommittees on Economic Growth, Energy Policy, and Regulatory Affairs and Health Care and Financial Services. “Who pays the price? Our constituents, more specifically, it is our constituents who live in black and brown communities,” Bush added.
ESG, also known as “sustainable investing,” according to the Corporate Finance Institute, can factor in corporate policies on gun control, environmental issues, abortion or other issues in addition to or instead of strictly looking at a corporation’s profitability. Critics of ESG pointed to crises in Sri Lanka, which banned chemical fertilizers that resulted in a 50% drop in crop yields in 2021, and Ghana, which suffered blackouts.
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“Environmental, social and governance, elements commonly known as ESG factors have material and defining benefits on company’s bottom lines,” Bush said. “Companies that face and responsibly address this reality carry less risk both for themselves and for society overall; companies that deny this reality and pretend they actually don’t have consequences are not only delusional, they are dangerous.”
“The GOP has made it clear that they have no problem putting the public in harm’s way for political gain. In using the debt limit to take our economy hostage, they willingly risked the full faith and credit of the United States simply to push through… politically unpopular policies that couldn’t otherwise win the votes it needed,” Bush claimed. “By attempting to prohibit responsible investing practices, they continue to risk the retirement security of hard-working people simply to protect corporate special interests that cannot attract investment on their own merits.”
Republican Gov. Ron DeSantis of Florida signed legislation on May 2 that prohibited state agencies and local governments from considering ESG when issuing bonds, barred banks from considering “social credit” when making loan decisions and prohibited discrimination on the basis of political, social or religious ideology.
Missouri announced it was pulling all assets from BlackRock on Oct. 18, claiming the company’s push for ESG was a “massive fiduciary breach.” Four other states announced they were pulling their assets, the Financial Times reported in October.
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