It’s not the first, nor will it be the last time seemingly positive things have been targeted for culture wars. Much of ESG principles relate to risk, also a core responsibility for corporations. Will sanity and ESG principles prevail?

Environmental, social and governance (ESG) investing is under attack from Republicans in the US who believe the concept “injects an ideological agenda through the economy” and that ESG “empowers an unelected cabal of bureaucrats to rate companies based on their adherence to left-wing values.” Recently 19 Republican senators have penned a letter saying it encourages “the proliferation of woke ideology” and some states have passed laws to limit its use.

According to The Economist says the term ESG first appeared in 2004 and has been widely adopted by corporations and the public with data showing American executives used the term 942 times during earnings calls in Q1 2022 and internet searches for ESG increased fivefold between 2019 and 2022. The term is often used in conjunction with other topics such as sustainability and diversity, equity and inclusion. Republicans have said a company’s main concern should be profits, arguing any focus on ESG diverts from their core responsibilities to investors.

While ESG is used extensively, it appears the culture war waged on the concept by some policy makers is having the desired effect; mentions of ESG on earnings calls totalled 575 in Q2 2023, down 39% from Q1 2022.