MEMO: Republican Attacks on Responsible Investing are Bad Politics
To: Interested Parties
From: Lori Lodes, Executive Director of Climate Power
Date: July 12, 2023
Re: MEMO Republican Attacks on Responsible Investing are Bad Politics
This week, as the country deals with a record-breaking heatwave, massive flooding, and warnings from major airlines that flight delays will increase due to climate change, Republicans on the House Financial Services Committee are launching a series of hearings attacking Americans’ freedom to invest responsibly. This is just the latest step in a long-running oil industry-funded campaign against the right to consider environmental and social governance factors when making investment decisions.
While Republicans have made it clear this is one of their top political strategies, it is falling flat with voters. Look no further than Ron DeSantis’ embarrassing presidential campaign for evidence that the “war on woke capitalism” is an exercise in futility.
At best, House Republicans will once again put on display for the country that they are focused on issues of little importance to most Americans. At worst, they will be doubling down on an issue where the majority of voters hold the opposite position.
A recent battleground state research project from Climate Power and HIT Strategies found that 55% of voters in AZ, GA, MI, NV, PA, and WI believe that financial managers should be allowed to consider environmental factors when making investment decisions for public retirement funds. The opposition is incredibly weak with only 17% saying they oppose and 29% having a neutral opinion.
This follows an earlier national poll from Climate Power and Data for Progress that found that not only do voters have no clue what “ESG” is with only 7% saying they have read or heard “a lot” about the term, a majority (54%) of voters agree that financial managers should be allowed to consider environmental factors, such as climate risks or the riskiness of investing in fossil fuels, when making investment decisions for retirement funds with just 34% opposing.
Republican Attacks on Common Sense
The House Republican position is that businesses should not be able to include risk factors such as intense heat in Texas, flood and storm damage in Florida, or the likelihood of wildfires forcing Americans to stay inside rather than breathe in harmful smoke. To them, Americans should be forced to invest their retirement savings in fossil fuels with no consideration of the unquestionable long-term movement toward renewable energy. Do allegedly free-market Republicans really believe somebody investing in Miami real estate should not be able to consider whether rising ocean levels are a risk during the life of the property?
Republicans leading this attack on responsible investing are speaking to their bubble. They know that if they say “woke” enough it will get them on Fox News. But their calculated risk is that voters will not learn that the Republican attacks on the freedom to invest mean higher risks for retirement funds, less transparency for the public on corporate malfeasance, and lessen the ability to maximize returns for investors.
As Republicans began this month’s anti-responsible investing campaign, it is critical to keep the context in mind. Voters are already against this effort, and when more learn that Republicans want to enact policies that could force pension funds to invest in companies that ship jobs overseas, have a history of discrimination and environmental violations or even use slave labor, the public opinion will move even further against Republicans. This is just the latest example of the entire Republican caucus being led by the most extreme MAGA positions and putting the House majority at risk in the process.