If Blake Masters, fresh from his win as the Republican nominee for Senate in Arizona, has his way, environmental, social and governance (ESG) ratings would be banned by Congress.
Masters, who will take on Democratic Sen. Mark Kelly November 9, in one of the most watched races in the country, has blasted ESG scores at least 10 times on the campaign trail, according to analysis by Bloomberg.
“I think we need to ban ESG scores and that’s my pledge to you. We’ll try to figure out how to do it,” Masters told the City of Maricopa Republican Club in July.
Master’s active opposition to ESG is part of a rising tide of GOP and pundit criticism and legal challenges over the Biden administration’s push to require corporations to align their business model and investments with combatting climate change and global warning.
Earlier this month a coalition of Republican state attorneys general sent a letter to Blackrock on behalf of their state pension plans, accusing the investment juggernaut of hurting investor returns and abrogating its fiduciary duty and anti-monopoly laws by focusing on sustainable energy.
The push against ESG comes after the Supreme Court in June limited the Environmental Protection Agency’s authority to set standards on climate-changing greenhouse gas emissions for existing power plants. The court ruled 6-3 that Congress, not the EPA, has the power to create a broad system of cap-and-trade regulations to limit emissions from existing power plants in a bid to transition away from coal to renewable energy sources.
If Republicans win the majority in the House and Senate, they could seek a legislative move against ESG scores—the grading of companies based on how “clean” their business model and vendors are. Such legislation could limit public companies from valuing factors other than their bottom line when making business and investment decisions.
Masters said he hopes to be part of the legislative “fix,” telling attendees at the Mohave County Republican Committee Picnic last month that ESG scores are one of America’s “new and modern threats,” Bloomberg reported.
“We have to just defend against this stuff because we’ll lose,” Masters told the conservative group Citizens for America in July. “We have to affirmatively take back from the left.”
A Republican-controlled Congress could also change leadership at both the Securities and Exchange Commission and the Department of Labor to stop the agency from pushing ESG scores and taking action to punish companies and licenses financial services professionals who refuse to use ESG scores or similar considerations when making investment decisions.