Few Americans Support Politically Motivated Investing Like ESG

Would you be comfortable with your investments furthering a company’s political agenda rather than your financial best interests?

Probably not—but that’s precisely what happens with environmental, social, and governance (ESG) investing.

In several recent polls, the Center for Excellence in Polling (CEP) asked likely voters about politically motivated investing strategies—like ESG—and found that it’s not popular with many Americans. In Arkansas, 71 percent of likely voters oppose investing taxpayer money in banks and investment funds that make business decisions based on their political agenda. More than two-thirds of Republicans, Democrats, and Independents in Arizona, and nearly three-quarters of likely Indiana voters, also oppose the practice.

ESG is egregious. It places a political agenda over maximum financial returns, playing politics with Americans’ retirement funds.

Essentially, large corporations and investors set their sights on a given political agenda, such as green energy, and make investments for their clients (including public pensioners) with the primary goal of furthering that political agenda—even if investing in something like fossil fuels would be a smarter financial choice.

Research by the Foundation for Government Accountability (FGA) highlights the harms of ESG:

• ESG threatens retirement accounts. ESG funds do not perform as well as non-ESG funds. In fact, ESG funds are consistently lagging in the S&P 500, an indicator of performance. It’s no surprise since these funds are not chosen based on their merit, but on their political relevance to the Left.
• ESG funds are more expensive than non-ESG funds. ESG is truly encouraging Americans to spend more to get less—that’s because ESG funds typically have fees as much as 40 percent higher than traditional, non-ESG funds. Nasdaq reports that “for every dollar you invest in an ESG fund, a little less than a third goes into stocks you could have gotten in a fund that isn’t ESG.”
• ESG is making inflation even worse. It cuts off industries vital to the American economy from capital—the slowdown in oil and gas production inevitably causes gas prices to rise, making everyday goods and services even more expensive.

ESG, at its core, is an attack on the free market—choosing winners and losers based on political (read: leftist) activism instead of making sure investments are selected based on their performance.

States like Missouri, North Carolina, and Florida taken action against ESG, but there’s more that can be done to protect investors and protect the economy from this economically suffocating practice. And many reforms taking aim at ESG have the strong support of voters. One option is for attorneys general to conduct investigations into institutions that fail to act in their clients’ best financial interests—82 percent of likely Ohio voters and 72 percent of likely Idaho voters strongly or somewhat support this step.

And nearly three-quarters of likely Ohio voters and nearly 60 percent of likely Idaho voters strongly or somewhat support the attorney general investigating banks and financial institutions that make investment decisions based on a political agenda without informing their clients.

ESG poses a serious threat to the retirement accounts of the American people and the economy at large. It’s both more expensive and less productive than traditional investment funds, and it’s been co-opted to be a tool of political maneuvering for the Left. Voters support states and attorneys general taking action against the practice—states should take notice and put a stop politically motivated investing practices.