GOP opening to link Democrats to ‘woke’ ESG investing

There is a new in-depth poll out on ESG investing, and just two things seem clear.

Most people don’t fully understand what environmental, social, and governance investing is. And most are willing to give businesses the benefit of the doubt on what to do rather than OK government efforts to crack down on the new practice.

But those trends are changing fast as Republicans get closer to controlling the House, and Wall Street is being forced to figure out the path that serves stockholders and the product-using public.

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“Hearings, legislation, lawsuits, and other forms of oversight are all on the Republican agenda, but companies have a small window to educate stakeholders on support for ESG and define it before it is defined for them,” said the project from Washington’s ROKK Solutions and the Pennsylvania State University’s Center for the Business of Sustainability.

Courtesy ROKK Solutions

At issue are efforts by Republicans to slap down ESG as “woke corporate policy” and make it a populist rallying cry and Democratic moves to get corporations to step out of their lane and back liberal social policy.

Over 33 pages, the poll analysis and interviews with House and Senate insiders titled “Navigating ESG in the New Congress” suggested that there is a way for companies to make ESG investments without catching flak. But they better be careful how far they walk the plank.

Companies that push for social or environmental changes way outside their product line or community will likely be slapped as hard as Coca-Cola and Disney were for promoting issues such as gay rights or Black Lives Matter. But those that make big promises and don’t deliver will get hit just as hard, said the report’s authors, ROKK’s Lindsay Singleton and Penn State’s Tessa Recendes.

Some numbers:

Courtesy ROKK Solutions

ROKK’s Ron Bonjean said there is an opening in that conflicting data for the Republicans to define ESG. “Most Americans don’t know or don’t understand what ESG is, which offers Republicans on the federal and state level with the opportunity to define it as corporate wokeism gone too far,” said Bonjean, a former spokesman to House and Senate Republican Leaders.

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Singleton and Recendes advised that businesses pay attention to ESG politics. “With the simultaneous rise of stakeholder capitalism and political threats to punish ‘woke’ companies, the risks are high for businesses engaged in social impact. Hearings, legislation, lawsuits and other forms of oversight are all on the Republican agenda, but companies have a small window to educate stakeholders on support for ESG and define it before it is defined for them. It is a fact that voters care about Environmental, Social and Governance efforts, which means politicians need to care too. As companies navigate a more polarized Washington, the most successful ones will do so in ways that show them why they should,” they said.