A majority of Americans don’t even know what it means, but ESG has become the latest front in the culture wars. In the last year, conservative activists and lawmakers have gone on the attack against “woke” capitalism — a term coined in 2018 to refer to companies that take a progressive stance on public policy issues. They blame these companies for spending too much time on issues like the environment and diversity and inclusion and not focusing enough on their traditional raison d’être: making money.
ESG refers to an investing approach that takes into account environmental, social and governance issues when choosing which companies to back. Long considered a noncontroversial strategy in the business world, ESG is now under attack by oil and gas industry heavyweights, some conservative activists and right-wing think tanks. The growing anti-ESG movement has pressured top financial firms to back off some of their net-zero commitments and motivated lawmakers in red states to take extreme actions that could upend their budgets.
