Attacks on sustainable investing are third stage of climate denial -- here's how to fight back

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C-SPAN video screenshot

On June 6 a subcommittee of the House Committee on Oversight and Accountability will hold the second in its series of hearings against investing using Environmental, Social, and Governance (ESG) principles).

The witness list includes longtime climate deniers such as Stephen Moore of the Heritage Foundation and Jason Isaac of the Texas Public Policy Foundation, both heavily funded by fossil-fuel interests.

If this hearing is anything like the first anti-ESG hearing on May 10, it will peddle in the latest scare tactics from the far right to whip up fear while hiding their real agenda.

Testifying then were two members of the Republican Attorneys General Association: Steve Marshall of Alabama and Sean Reyes of Utah.  

“ESG is a clear and present danger to democracy,” Marshall told the committee: “An unelected cabal of global elites is using ESG to hijack our capitalist system to capture corporations and threaten the hard-earned dollars of American workers.”  

ESG is “an open conspiracy to bypass Congress and instead impose costly changes on American consumers” that 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,” Reyes said. 

Such wild conspiracy theories didn't just pop up from nowhere. It's important to understand where they come from -- and why.

Largest known political donation in U.S. history 

In April 2020, a Chicago electronics manufacturing magnate named Barre Seid worked with Leonard Leo – known for leading the Federalist Society, which pushed the U.S. Supreme Court far right – to donate all shares of his business to a newly created entity, Marble Freedom Trust, which Leo chaired. 

The business, Tripp Lite, had made a fortune by manufacturing police, fire, and ambulance lights, then producing surge protectors for home computers. After Marble Freedom Trust gained ownership, it then sold Tripp Light – reaping $1.6 billion for itself and avoiding $400 million in taxes for Seid. 

Leo stepped down from full-time leadership of the Federalist Society to become chairman of another new company called CRC Advisors, which advises and manages conservative nonprofits. Now he was aiming to remake all American society in the way he had remade the court.  

“The idea behind the network and the enterprise we built is to roll back liberal dominance in many important sectors of American life,” Leo told The New York Times. “I had a couple of decades or more of experience rolling back liberal dominance in the legal culture, and I thought it was time to take the lessons learned from that and see whether there was a way to roll back liberal dominance in other areas of American cultural, policy and political life.” 

Through Marble Freedom Trust, Leo is funding a sprawling network of interrelated organizations that work to roll back progress in a variety of areas, including reproductive rights; diversity, equity and inclusion; voting access; and climate action.  

Particularly galling to Leo is ESG. “The ESG movement is polluting our culture and assaulting the dignity and worth of people,” Leo told The Wall Street Journal. “Our enterprise stands with a growing group of Americans who are fighting to crush leftist dominance in this arena.”  

Players in the anti-ESG network 

Dozens of organizations, both old and new, are part of the anti-ESG network, funded by both Leo and other donors, notably fossil fuel corporations. In the past year alone, Marble Freedom Trust spent $183 million, funneled primarily through the Concord Fund, previously known as Judicial Crisis Network, and the 85 Fund, previously known as Judicial Education Project. The trust still has $1.2 billion on hand. 

Here are some groups that benefit from the ant-ESG largesse – can you spot the themes in italics? 

  • CRC Advisors. Chaired by Leo, CRC Advisors is the paid consultant and sometimes funder for many of the other groups in the network, as well as for corporations such as Chevron. CRC Advisors has made $43 million from its clients, enriching Leo in the process.  
  • Consumers Research. Founded in 1929 to test and report on consumer products, Consumers Research split from the better-known Consumer Reports in 1981 and became a watchdog of liberal causes. Turbocharged with funding from Leo, Consumers Research has spent almost $10 million on an anti-ESG campaign, personally attacking BlackRock Chair and CEO Larry Fink and pushing Vanguard to drop out of the Net Zero Asset Managers Alliance. They also issue “woke alert” text messages on brands they consider to be too far left, such as Target and Bud Light.  
  • State Financial Officers Foundation. Based in Shawnee, Kan., SFOF once pulled together state treasurers to discuss issues like borrowing costs and debt loads but has recently emerged as a key player in using state governments to blacklist companies that employ ESG practices. In response to President Biden’s plan to transition to clean energy, SFOF began working with other organizations that have deep ties to the fossil fuel industry to combat climate action by passing state legislation, scuttling federal appointments, and attacking ESG.  
Members of the State Financial Officers Foundation. Credit: Center for Media and Democracy.

Other anti-ESG organizations include: 

  • American Legislative Exchange Council. A longtime corporate bill mill funded in part by the Koch brothers, ALEC endorsed model legislation that would ban states from using ESG criteria in pension investments. Bills were introduced in 33 states this year, passing in five. ALEC also considered model legislation that would forbid states from contracting with companies that practice ESG, in some cases mandating a blacklist of firms that restrict or boycott fossil fuels. Although ALEC did not officially endorse the contracts legislation, bills were introduced in 40 states, passing in five.  
  • Heartland Institute. Another climate denial think tank, Heartland has also recently turned its attention to ESG. Its April report claims ESG threatens individual liberty, free markets, and the U.S. economy. Heartland has long hosted an annual climate misinformation conference, now featuring anti-ESG speakers such as Utah Treasurer Marlo Oaks, who compared ESG to Nazism.  
Utah State Treasurer Marlo Oaks, national policy chair for State Financial Officers Foundation, linked ESG investing to Hitler at the Heartland Institute's annual climate denial conference in February. Photo clipped from Heartland Institute conference video.

Other organizations in the anti-ESG orbit include National Center for Public Policy Research and National Legal and Policy Center, which file anti-ESG shareholder resolutions and publish anti-ESG proxy voting advice; Teneo Network, a Leo-organized group of elected officials, journalists and public affairs professionals who aim to roll back what they see as liberal dominance; and 1792 Exchange, which has ties to Cleta Mitchell and Ken Blackwell, who worked with Trump to overturn the 2020 election.  

What do all these groups have in common? They want to roll back progress on clean energy and human rights because they profit from a system based on exploiting workers and extracting fossil fuels. 

What are they doing with all that money? 

Center for Media and Democracy, Documented, and InfluenceMap have charted how these anti-ESG groups are tied together. They sit on each other’s boards and staff, sponsor and speak at each other’s conferences, and strategize with each other on legislation and administrative rules. They publish reports, post websites, testify at hearings, and issue letters to government officials and corporations. 

Among their activities:  

  • On the federal level, pressure from state treasurers pushed two of Biden’s nominees to withdraw: Saule Omarova for Comptroller of the Treasury, who came under attack for saying fossil fuel bankruptcies would help fight climate change, and Sarah Bloom Raskin for the Federal Reserve because she argued financial regulators should crack down on climate risks. 
  • On the state level, a parade of representatives from many of these organizations have testified at hearings on proposed anti-ESG legislation. Of the 162 bills and resolutions in 37 states, 20 have passed so far with three more expected, and 64 have died, including all bills in 10 states.  
  • On the business level, state attorneys general sent a letter telling members of the Net Zero Insurance Alliance they may be violating antitrust laws. Meanwhile, state treasurers sent BlackRock a letter demanding answers to nine pages of questions about proxy voting. 

The pressure on BlackRock is having some effect. Fink has been backtracking on public discussion of climate.

In 2020 BlackRock CEO Larry Fink's annual letter mentioned climate 29 times. “Climate risk is investment risk,” he wrote. “In the near future – and sooner than most anticipate – there will be a significant reallocation of capital” because of it. Now BlackRock is backing off its 2050 commitments and touting its fossil-fuel investments.  

BlackRock is not alone. In a classic example of green hushing, Coca-Cola CEO James Quincy explained that while right-wing attacks have made public discussion of ESG toxic, the company isn’t going to stop ESG practices. “I’m just going to stop saying ‘ESG’,” he said.  

Third stage of climate denial 

The anti-ESG movement may seem sudden and virulent, but it does not come out of nowhere. Rather, it can be understood as a new stage in the long history of climate denial. As InsideClimate News and other outlets confirmed, Exxon knew as early as the 1960s that burning fossil fuels would cause global warming; yet instead of changing their business model, they launched a campaign of climate denial. 

The “Exxon Echo Chamber” – a group of public relations agents and lobbyists from the tobacco and oil industries and Exxon-funded think tanks including ALEC and Heartland Institute – pushed the Senate to pass the Byrd-Hagel Resolution in 1997 that prevented ratification of the Kyoto Protocol. 

A decade later, the “Kochtopus” – a network of Koch-funded PR agents, lawyers, lobbyists, academics, think tanks, PACs and politicians – created an astroturf campaign to defeat the American Clean Energy and Security Act of 2009, which would have established a cap-and-trade program in the United States.  

Now, another decade-plus later, we are at a similar crossroads in which the fossil fuel industry has joined with conservative activist Leonard Leo to defeat what it sees as another threat to its profits – ESG – by attaching climate action to broad culture war controversies on race, gender, and sexuality. 

Sens. Sheldon Whitehouse, Brian Schatz and Martin Heinrich explain why this is happening

“The underlying problem is that the fossil fuel industry is running up against a 'risk wall,' where long-established economic risks associated with climate change are now sufficiently clear and present to trigger ordinary risk-reporting requirements in financial markets. Rather than reduce their emissions, or face up to the risks that they cause, the fossil fuel industry is trying to break and remake traditional risk reporting to selectively remove reporting of climate-related risks.” 

The underlying problem is that the fossil fuel industry is running up against a 'risk wall,' where long-established economic risks associated with climate change are now sufficiently clear and present to trigger ordinary risk-reporting requirements in financial markets."

-- Sens. Sheldon Whitehouse, Brian Schatz and Martin Heinrich

In past stages of climate denial campaigns, the fossil fuel industry tried to rewrite the science. Now that the climate crisis is impossible to deny, it is trying to rewrite our economic system by treating the material risks of climate chaos as if they are political and subjective, when they are fact. 

ESG train has left the station 

Although the Leo-funded anti-ESG campaign is pushing some businesses to stop talking about their commitments to sustainability and equity, in many ways the ESG train has left the station. Already $8.4 trillion – or 1 in 8 dollars under asset management – use sustainable investing strategies, according to US SIF: The Forum for Sustainable and Responsible Investment.  

Moreover, the consensus among investment managers is that ESG works. As journalist Peter McKillop recounts, ESG is thriving: “85% of investment managers and 96% of S&P 500 companies use ESG to mitigate risk, find opportunities, and build profits. Among U.S. institutional investors, 81% plan to increase ESG allocations, boosting more sustainable assets under management 84% by 2026.” 

That means the most effective way we can fight the anti-ESG campaign is to keep voting with our dollars. Leonard Leo and the fossil fuel industry have a lot of money, but what they don’t have is people. By voting with your dollars, you are telling businesses that the people who buy their products and services want them to use their financial assets to create a more sustainable and equitable world. 

Take action! 

When consumers and investors work together to encourage companies to adopt climate-friendly policies and support workers and human rights, it has an impact – and makes companies more profitable over time. Here are multiple ways you can urge companies to improve corporate responsibility: 




For more information on responsible finance and community investing, check out our Guide to Socially Responsible Investing and Better Banking (to be updated this summer). 

Spread the word! Share information about the fossil-fuel driven attack on ESG and how it harms us all. You can start by sharing this blog series and social posts and articles about the true motives of the anti-ESG crusaders who want to keep us addicted to fossil fuels and fight basic human rights. 


For more information about the anti-ESG campaign and the groups behind it, check out the work of these tireless research organizations: 

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