The GOP’s war on corporate America’s environmental and social agenda is creating an unexpected set of Wall Street allies: Democrats defending free-market capitalism.
Leading progressives and longtime finance industry critics including Rep. Maxine Waters of California and Minnesota Attorney General Keith Ellison, both Democrats, are embracing the role as House Republicans escalate attacks on investing practices that take into account environmental, social and governance — or ESG — factors. The GOP campaign is pitting Republicans — historically the party that’s less eager for government regulation in finance — against big money managers and other Wall Street players, including BlackRock and JPMorgan Chase.
Republican lawmakers warn that the ESG push by firms and financial regulators is hurting investor returns and the fossil fuel industry.
Waters this month accused Republicans of being “anti-capitalist, anti-investor, anti-business and anti-American” as they launched hearings to discourage efforts that BlackRock CEO Larry Fink and other industry leaders say are critical to addressing climate change’s long-term risks for investors. The House ramped up scrutiny as Republican state officials and presidential candidates take an even harsher approach, with Florida Gov. Ron DeSantis fighting with Disney and other major corporations over social issues.
“It is a change of events. It is strange,” Ellison, former co-chair of the Congressional Progressive Caucus, said in an interview. “It feels like people on the conservative end are arguing to try to dictate to private sector, profit-seeking firms what they can and can’t do.”
The response illustrates how the GOP’s escalating culture war with big business is straining its relationship with Wall Street and creating a new line of attack for Democrats ahead of the 2024 election. Rep. Brad Sherman (D-Calif.) said at a hearing this month that former President Ronald Reagan “would be ashamed” of his party’s new approach.
“The party formerly of free markets has decided that they will use the power of government to pound on Disney, to pound on banks that … won’t invest in the carbon industry,” Rep. Jim Himes (D-Conn.) said in an interview. “We’re standing up for free markets against a Taliban-like attack on the private sector.”
Rep. Andy Barr (R-Ky.) sponsored a measure that would have repealed a Biden Labor Department rule that permits retirement investing tied to environmental and social goals.
