Leading Democrat blasts GOP war on ‘woke’ in anti-ESG hearing

Rep. Jamie Raskin (D-Md.) blasted the GOP attacks on “woke” ideology during a House Oversight Committee hearing Wednesday, arguing the term has a proud history and that it should guide companies in their business decisions.

“The word work comes from the Indo-European root ‘weg,’ which means to be strong and alert,” Raskin said at a hearing focused on environmental, social and governance (ESG) investing.

That word also evolved into the modern word vigilance.

“The whole point of being a fiduciary is to be vigilant, watchful and alert to opportunities and risks,” Raskin said in defending ESG investing. “And that’s what asset managers, corporate board members and executives do with other people’s money.”

The opposite of a woke investing strategy, Raskin argued, “is a negligent and inattentive investment strategy.”

State and national Republicans have gone on the attack over ESG, arguing that the embrace of ESG principles by multinational finance institutions represents an attempt by unelected, largely-foreign elites to set domestic policy in the U.S.

In testimony on Wednesday to the House Oversight Committee, Utah attorney general Sean Reyes called ESG part of “an open conspiracy to bypass Congress and instead impose costly changes on American consumers using the power of horizontal agreements by key players in our financial system.”

The GOP case against ESG is simple: that asset managers shouldn’t be considering anything other than financial returns when they make investment decisions. 

Keeping climate goals — particularly the Paris Climate Agreement goal of keeping planetary heating as close to 1.5 degrees Celsius as possible — will have drastic results that Americans haven’t agreed to, Reyes argued.

Such changes “would impact everything from how we grow our food and what we eat to how we power our homes and businesses and even what kind of cars we are allowed to purchase.”

One witness called by committee Democrats disagreed.

“We are witnessing a widespread, highly coordinated, politically motivated attack on investors and the hard-working people they serve,” Illinois state treasurer Michael Frerichs told the committee.

“ESG is about looking at a wider range of risks and value opportunities that can have a material financial impact on investment performance.”

In the category of an environmental factor, an investor in a car company might want to think “about whether that company is aligned with market expectations and preparing for the shift to electric vehicles.” 

As a ‘social’ factor, Frerichs pointed to the costs of being invested in a pharmaceutical company with “exposure to massive lawsuits because of its role in the opioid epidemic.”

To the GOP, however, such considerations constitute an attack on conservatives’ beliefs — language that was an explicit part of Gov. Ron DeSantis’ (R-Fla.) far-reaching anti-ESG bill last week.

The attack on sustainable investing is personal for Raskin, who saw his wife Sarah Bloom Raskin’s nomination for the role of top cop at the Federal Reserve fall apart over allegations that her concerns around climate financial risks were an attempt to do policy by the backdoor.

But Senate Republicans attacked her during her 2022 confirmation hearing over her comments about the importance of reducing climate risk to ensure the health of the American financial system.

During that process, “Sarah was subject to baseless attacks from industry and conservative interest groups,” President Biden said in a statement after she withdrew from the nomination process.

“Unfortunately, Senate Republicans are more focused on amplifying these false claims and protecting special interests than taking important steps toward addressing inflation and lowering costs for the American people.”

In a 2020 New York Times op-ed, Bloom Raskin argued that the federal reserve should not subsidize fossil fuels, a technology whose impacts on climate change and diminishing position versus newer technologies made it inherently risky.

GOP members pounced on this idea at Bloom Raskin’s hearing, with Sen. John Kennedy (R-La.) causing her of support for “driving the oil and gas industry into bankruptcy.”

Other attacks levied against ESG today echo criticisms of Bloom Raskin last year.

“The unelected governors of America’s central bank shouldn’t be responsible for dealing with difficult issues like global warming, social justice and education policy,” then-Sen. Pat Toomey (R-Penn.) said at the time.