(VitalNews.org) – Conservative lawmakers are tiring of the federal government’s Environment, Social, and Governance (ESG)-based meddling in the affairs of private companies. That frustration is expressed in a congressional resolution expressing disapproval of the Department of Labor’s (DOL) tolerance of ESG mandates.
The question now: Will President Joe Biden issue his first veto? The White House announced that he would on February 28.
In January, Senator Mike Braun (R-IN) and Representative Andy Barr (R-KY) introduced the resolution of disapproval. It has the support of all Republican senators, Democrat Joe Manchin of West Virginia, as well as more than 100 companies and organizations. The resolution was passed by House lawmakers in a 216-204 vote.
Conservatives widely see ESG standards as hard-left political ambitions dressed up as “necessary for business.” ESG proponents tend to focus on “diversity” — how many non-white people a company hires or how many women, for example. They take a progressive position on climate change and generally advocate for tighter government rules on energy generation, hiring practices, and “social responsibility.”
Business leaders have pointed out that ESG goals are not the law (though the Biden administration appears to prefer that they were) and often conflict with a company’s legal and fiduciary duty to work in the interests of shareholders.
Depending on the company, ESG rules may become very fine-grained, looking over how the company treats its employees, how it deals with charitable organizations, and how it invests its money. ESG frowns on investments in companies that proponents decide are a net social negative. This usually aligns with the political priorities of progressive leftists.
Conservative lawmakers have criticized the DOL’s rule that allows companies to factor ESG into their investment decisions. Some believe the effect of this rule isn’t merely to “allow” a company to consider these factors but acts as an implied mandate from the federal government.
The White House’s faith in ESG is unshaken. A statement from the White House characterized the practice of ESG as necessary for a successful company.
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