A RELATIVELY NEW front in the culture wars is emanating from the realm of finance: the push to increase financial investments that take into account “environmental, social, and governance” considerations. What is known in the finance industry as ESG has grown considerably over the past decade. According to the Global Fossil Fuel Divestment Commitments Database, the amount of wealth divested from fossil fuels worldwide has grown from $52 billion in 2014 to more than $40 trillion last year. But the increased visibility and prominence of ESG investing has triggered a backlash, with at least seven GOP-controlled states enacting anti-ESG policies and 15 others introducing bills to disallow the application of ESG principles in state investments such as pensions.
The anti-ESG push is coming from the usual suspects. Texas is heavily involved, due to the prominence of the fossil fuel industry in the state’s economy. Right-wing groups such as the Heritage Foundation and the American Legislative Exchange Council have also been big promoters of model anti-ESG legislation. West Virginia Attorney General Patrick Morrisey has formed a coalition with more than 20 of his counterparts to challenge the Securities and Exchange Commission’s ability to implement a climate disclosure rule, a case that could end up at the Supreme Court and hobble the executive branch’s ability to interpret and act on congressional statutes. Apparently, many conservative activists and politicians are only champions of the “free market” when it advances their ideological agendas.
One of the complicating factors for these “anti-woke” crusaders is the fact that, as of 2021, 72 percent of institutional investors use ESG principles in their approach to investment, and close to 90 percent of investment companies report some ESG data to shareholders. ESG didn’t become widespread among investors simply because of an altruistic commitment to the common good — ESG makes good business sense for investors looking to maximize their long-term returns. In other words, ESG simply means that many investors are considering the long-term environmental and social risks posed by phenomena such as climate change when deciding how to invest.
The right-wing attacks on ESG investing raise a deeper question: How should we think about the ethics of investing our money? In Genesis, humanity is called to exercise good stewardship as caretakers of the Earth. How we invest our financial resources — from stocks to retirement funds — is a direct reflection of whether we prioritize the common good and stewardship of God’s creation. As Christians, we should seek a higher standard than simply gaining the highest return on our investments. Proverbs 16:8 teaches: “Better is a little with righteousness than large income with injustice.” We shouldn’t simply trust investment companies who offer ESG options without looking into the details — some companies, such as BlackRock, offer investment portfolios free of fossil fuels and yet continue to invest hundreds of billions of dollars in the fossil fuel industry. The church should play a leading role in asking these deeper moral questions and push back against efforts to curtail ESG investing. We must all demand better answers from those entrusted with our investments.
Rev. Adam Russell Taylor is president of Sojourners and author of A More Perfect Union: A New Vision for Building the Beloved Community. Follow him on Bluesky @revadamtaylor.
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