date: January 1, 2023
arrive: All Republican Politicians Concerned About ESG
from: Bob Eccles
Subject: Invite to meet with you
According to tradition, resolutions are made on New Year’s Day. This is one of mine. This is a proposal to meet with any Republican politician at the federal or state level to discuss ESG.
Before explaining my resolution, I would like to sincerely wish everyone a Happy New Year and all the best for 2023. Although I am a Democrat, I am not a dogmatist. I live in Massachusetts and had the pleasure of voting for Charlie Baker for Governor twice and contributing to his campaign. Granted, not a lot, since I’m just an academic. So despite our political differences, I’m really expressing my New Year’s resolutions.
I’ll also admit that you probably don’t know who I am because I’m not active in politics. Hypocrisy aside, I am a globally recognized figure in the ESG field. I’ve been working on it much longer than any of you, like 30 years. IMHO, I know more about it than any of you. Unlike you and some of your leftist counterparts, I don’t approach this topic from an ideological perspective.
Lately I’ve been writing about what some of you think about ESG. This has become a fairly prominent topic in the Republican Party, so you guys have been keeping me busy! Here is the current list along with some others discussed below:
“The Fable of the Pirkey Power Plant (Told by Texas Senator Brian Hughes)”
“I have not heard a reply to my letter from Rep. Jim Jordan (R-OH-4)”
“Suggested Corporate Goals for ESG House Hearing: NextEra Energy”
“Thanksgiving Memo to Florida Governor Ron DeSantis”
“I personally thank SFOF for its commitment to DE&I”
“Big Brother Is Watching You: ALEC’s Doublethink Attack on America’s Free Market
“An Open Letter to Five Republican Senators (Hope It Helps You)”
“You Can’t Tell Players Without a Scorecard: Sorting ESG, Impact and Sustainability”
“A Linguistic Analysis of Section 809 Boycott Provisions in Texas”
“Value-Based Investing Politics”
“Drilling into DRLL’s Top 10 Holdings: Walker Analysis”
“Three What-Ifs and Worrying Sober Questions About GOP Executives”
“Looking at climate change through the eyes of ExxonMobil”
“Some Thoughts on the RSC Memo, ExxonMobil, and Tesla”
“Mr. Pence and Friends’ Tutorial on ESG Investing in the Oil and Gas Industry”
I suspect that very few of you have read these little articles. If you do, I’m also sure you won’t like them. Fair enough, because we have very different views on this issue. In short, many of you define ESG as a Walker left progressive political agenda that interferes with US capital markets.As Mr. Pence wrote on May 26, 2022 to wall street journal“ESG is a pernicious strategy because it allows the left to accomplish what it could never achieve at the ballot box or through free market competition.”
In contrast, to show you how different our views are, I look at ESG as an idea that actually strengthens our free markets through better capital allocation. ESG is simply about the smart management of significant risk factors by companies and investors.
Our capital markets are the deepest and most sophisticated in the world. We need to keep them that way. Underlying all of this is transparency, the rule of law, and sensible regulatory enforcement. Transparency includes reporting on material risk factors that are critical to capital allocation and value creation. Like it or not, these include some environmental and social issues. Capital markets do not exist in a vacuum outside of Earth and society.
Under the guise of “free market” rhetoric, you are actually interfering politically in a way that will hurt them, by trying to suppress information that investors need and that companies are already reporting. Ironic, isn’t it, given your claim that’s what the dreaded “progressives” are doing?You also fail to understand “fiduciary duty”, another term you sometimes cite, actually need Companies and investors should consider these important ESG risk factors.
I’m not the only one who sees it this way. The same goes for my good friend Dan Crowley, a partner at K&L Gates, someone I’ve known for years, and a staunch Republican. You can get a good read on his views in the webinar we co-host on November 29, 2022 entitled “ESG is not ‘wake up’, it’s capitalism’. His K&L Gates partner, Karishma Page, moderated the session brilliantly.
You might also like How This Story Happened. I published an article titled “Bribing Capitalism: The Republican Party’s Brilliant Tactic to Exploit Ordinary Americans.” In true bipartisanship, Dan emailed me saying he was not happy with the article and explaining why.We had a very constructive conversation, which led us to co-author “Turning the ESG Debate: Separating Material Risk Disclosures from Salient Political Issues,” by Harvard Law School Corporate Governance Forum. We note that “many Democrats see ESG as an opportunity to pursue desirable social change through collective action in the form of democratic capitalism. Most Republicans see the ESG movement as an offshoot of the Green New Marxism in disguise. While both views have some merit, neither accurately reflects market and regulatory developments over the past quarter-century.” We then explain.
Our webinar is the next step in a small informal event aimed at starting a bipartisan discussion on ESG. This will be followed by another webinar on December 12, 2022, “Where Does the ESG Debate Go?” hosted by the Bipartisan Policy Center (BPC). The group consisted of Dan, Aron Szapiro from Morningstar, and myself. It is moderated professionally by Michele Nellenbach of the BPC.
Rep. Bill Huizenga (R-MI-4) had some great opening remarks in a Q&A with Tim Doyle (R), also of the BPC. Using his real estate background, Mr Huizenga emphasized that ESG is all about “stuff, matter, matter”. Not ideology.in his 15 minutes constructive Not once in the comments did he use the word “wake up”. I’m the first to speak after Mr. Huizenga, and I very much agree with him. This shows that bipartisanship is not my fantasy – but only you can make it a reality.
This brings me to my New Year’s resolutions. I’m more than happy to meet anyone interested in discussing ESG. We can do this in private or in public. Dan would be more than welcome to join me if he wanted to.
I’m not kidding. As proof, I even brought up a topic we might have a mutual interest in. The day after Christmas, I published “Companies Should Pay and Report Their Taxes: A Bipartisan Proposal”. In it I point out that large corporations (a source you care a lot about) pay much lower tax rates than SMBs. I don’t think that’s right, and I suspect you aren’t either.
Taking it a step further, I published “ESG is not about moral standards and moral values” three days later. This is a critique of the ESG discussion on the other side of the political spectrum. I don’t like the left’s ideological interpretation of ESG, just as I don’t like the right’s ideological interpretation of ESG. ESG is not what some on the left would like it to be. That’s not what the people on your right worry about. It’s just about managing material risk factors to create shareholder value.
I condemn the polarization that exists in this country, and I know it comes from the right and the left. I also admit that the field of politics is above my pay grade. But I’m 71 and not naive. The Republicans now control the House of Representatives and I believe there will be hearings on ESG. I’d be really happy if these basic questions were answered in a bipartisan spirit (from both the left and the right) instead of devolving into a political arena. What is ESG or is it not? What can and cannot be done with ESG? What can the private sector do, what should it do, and what should it do within the confines of the political process?
I know we have a common interest in keeping America the great country it is now. Admittedly, we have different ideas about how best to do this. So how do we have a bipartisan discussion about ESG, rather than using it as a rhetorical device to further polarize America?
Check me out. Ask around. Well, I know you’ll have an employee to do this, and the odds are slim that this offer will even reach either of them. But if it does, and they bring this up to you, and you want to get involved, I can be easily reached at firstname.lastname@example.org.