Top Democrats lashed out at a “new wave” of climate denialism in the Republican party at a corporate conference this week, warning “Maga ideology” was becoming a major risk to US industry and business.
John Podesta, President Biden’s senior clean energy adviser, cautioned Wall Street investors that Republican attacks on “woke capitalism” were “irresponsible” and against free market principles.
“Some people in Washington are taking this moment to try to hamper fiduciary responsibilities and investment decisions with Maga ideology,” said Podesta, adding that investing in clean energy was not controversial but “common sense”.
“You can’t de-risk your portfolio if you can’t factor material climate hazard into your investment decisions,” he said.
Al Gore, the former Democratic vice-president and climate advocate, said Republican-led anti-ESG bills were part of a “new wave of climate denial”.
“The weight of the absurdity is impressive . . . Their policies and their ideology cannot survive in a world that really pays attention to truth and the rule of law,” Gore said.
The comments from senior Democrats at a Ceres conference on Thursday come amid an escalating conflict over the Biden administration’s clean energy strategy and a Republican backlash against the environmental, social and governance movement on Wall Street.
Biden issued the first veto of his term this week, rejecting a Republican bill to ban retirement funds from considering ESG matters such as climate change in their investment decisions.
More than half of US states have made efforts to crack down on ESG investing in public retirement funds, according to a tracker by Ropes & Gray. The law firm has tracked at least 50 anti-ESG bills introduced so far in 2023, more than double the entirety of last year.
Florida’s Republican governor and potential presidential candidate Ron DeSantis is among the loudest critics of ESG, calling the practice “woke capitalism” and a threat to financial returns. DeSantis rallied 18 governors into an alliance last week to curb ESG investing at the state level.
“All these people fretting about ‘woke capitalism’ don’t actually seem to believe in capitalism,” Podesta said. “Because if you ignore risk [such as climate change], you’re going to end up losing a lot of money and it’s irresponsible.”
Democratic senators Joe Manchin and Jon Tester, and House representative Jared Golden, sided with Republicans in the anti-ESG measure struck down on Monday. Despite the veto, the bill’s passage through Congress has been marked as a victory among Republicans in their crackdown on sustainable investment.
“The code red [is] blinking, both in the science but in real life,” said Ali Zaidi, the White House national climate adviser. “The president’s veto this week is a reminder that some folks maybe want to even ignore that.”
The Republican attacks on sustainable investment come despite the party’s potential to benefit significantly from the clean energy transition. More than $90bn in clean energy investments have been made since the landmark Inflation Reduction Act was passed in August, largely in Republican states like Georgia, Idaho, Tennessee and South Carolina, according to ClimatePower.
More than 270 investors and companies, including Calstrs, Boston Trust Walden and Franklin Templeton called on policymakers to protect their “freedom to invest”, including the ability to factor climate into their fiduciary considerations in a statement led by Ceres and the We Mean Business Coalition on Thursday.
“If markets cannot work freely within the rules and boundaries of the law . . . we are going to start to get into trouble,” said Anne Simpson, global head of sustainability at Franklin Templeton.