House hearing heats up when Democrat objects to GOP colleague’s use of term ‘woke’ to criticize ESG

A congressional hearing Tuesday on ESG investing took an abrupt and contentious turn when a House Democrat accused her Republican colleagues of being racist for describing the hot-button financial practice as woke capitalism.

The investment strategy known as environmental, social and corporate governance — or ESG — has emerged as a leading culture war issue for Republicans because it takes climate change and social justice politics into consideration.

Republicans described ESG as a jeopardy to businesses and Americans’ investment savings at a House Oversight Committee hearing on the subject. They cited the Biden administration’s recent Labor Department rule allowing 401(k) fiduciary managers to consider ESG factors without clients’ knowledge.

“ESG is being utilized in an attempt to rewrite the fabric of America with woke policies that deliver nothing but higher prices, fewer market choices and cultural oppression, not to mention jeopardizing returns on investments for retirees and regular Americans,” Rep. Pat Fallon, Texas Republican, said in his opening remarks.

By the hearing’s end, Democratic Rep. Cori Bush of Missouri had apparently heard the term woke one too many times.

She teed off on Republicans for characterizing ESG throughout the hearing as woke. She accused them of being racist and made reference to the word’s origin that stems from the Black Lives Matter movement after the 2014 killing of Michael Brown in Ferguson, Missouri, by police.

“When you say ‘I’m anti-woke,’ when you talk about ‘wokeness,’ you’re saying ‘I’m anti-Black,’ and ‘I don’t want Black people to speak up for themselves,’ and ‘I don’t want equality and justice for Black folks,’” Ms. Bush told Republicans. “This is not wokeness, what we talked about in here. Unless you are saying ‘I’m racist, a white supremacist and bigoted,’ stop talking about wokeness. You can’t tell me that I’m wrong because I’m from the very movement where this came about. Don’t let a fascist tell you what being woke means.”

Rep. Lisa McClain, Michigan Republican, appeared surprised by the rhetoric.

“Forced ESG compliance is harming American workers and businesses. Forced — not free market, not free to choose,” Ms. McClain said. “All of a sudden, I’m a white supremacist and I’m racist and — no, I’m just talking about the facts. But if you can’t beat me on the facts, I guess call me names.”

Mr. Fallon responded to Ms. Bush with sarcasm and by condemning what he described as “incendiary” and “gas-lighting” remarks.

“If you want to invest in mermaid freedom, knock yourself out,” he said. “If you want to invest in carbon-free cookie monsters, knock yourself out. If you want to invest in a unicorn ranch, knock yourself out. It’s about not disclosing to the investor the criteria they’re using.”

Mr. Fallon later said that racism in the U.S. is a “diminishing phenomenon,” to which Ms. Bush laughed.

“It’s not white people hating on Black folks. It’s not that at all,” Mr. Fallon said. “You have to focus on the opportunities that this country provides you.”

Ms. Bush made inaudible remarks then got up and left the room as Mr. Fallon, who was presiding over the hearing, prepared to gavel the session to an end.

Throughout the hearing, Democrats countered that barring the ability to consider ESG factors would amount to fewer market choices.

Rep. Katie Porter, California Democrat, used the analogy that choosing a new vehicle based on a wide variety of factors is akin to companies disclosing ESG factors so investors can determine if it suits their financial and personal preferences.

“If I value investing in a company that prioritizes energy efficiency, I can’t make that free choice if Republicans limit information on the company’s environmental footprint. What kind of freedom is that for me as an investor?” Ms. Porter said. “Let’s call this hearing what it is: It’s an attack on economic freedom.”

ESG promotes divestment from fossil fuels in a bid to boost the transition to clean energy, prompting boycotts of the world’s largest pro-ESG asset managers like BlackRock, Vanguard and State Street by Republican-led states who charged the companies with threatening their economies’ oil, coal or natural gas industries.

Such financial firms still hold hundreds of billions of dollars in fossil fuel investments, but the push under ESG to decarbonize the global economy has spurred fierce pushback.

Congress passed a Republican-led measure earlier this year that garnered the support of a handful of Democrats to roll back Mr. Biden’s ESG rule, which critics argued would allow investment managers to promote political agendas or companies that may go against clients’ beliefs without their knowledge.

Mr. Biden vetoed the bill, and the House was unable to muster the two-thirds needed to override it.

“I am all for the freedom to invest your own money into causes you believe in,” Ms. McClain said. “But that’s not what’s happening here. Managers are investing your money in the causes they believe in. And we are seeing real consequences for Americans’ retirements.”

The hearing, which included testimony from think tanks and a university professor, marked the second from the House Oversight panel in recent weeks focused on ESG.

“Part 1 was actually the stupidest hearing I’ve ever been to,” Ms. Porter griped. “Please, God, let there not be a Part 3.”

Source: WT