Dr. Mendenhall on the Dangers of ESG in Alabama
*Update: Anti-ESG bill 261 passed both the House and the Senate. It awaits the Governor’s signature to become law*
The rise of Environmental, Social, and Governance (ESG) policies is dangerous to corporate America (and therefore, the individual consumer) because it pressures companies to align themselves with a woke, progressive agenda in order to receive investment funding. To explain more about the dangers of ESG, Dr. Allen Mendenhall of Troy University joined ALCAP President Greg Davis on Priority Talk Radio to discuss the topic:
“There are two ways of thinking of [ESG].… The first is as a framework or strategy that individual corporations undertake internally. So private businesses making decisions to do woke stuff. The second way of understanding it is the non-financial standard or metrics that are factors that asset-management firms, financial institutions, and institutional investors––among other big players––consider when they allocate capital or assess risk,” he said.
Dr. Mendenhall also talked about the anti-ESG bill he supports (SB 261) in the Alabama State Legislature. He joins the growing chorus of conservative voices and states who are seeking to legally oppose the use of ESG, particularly in investing. If ESG is fully implemented in Alabama, this will harm profit-seeking companies and reward progressive companies. This will skew the incentive structure––companies exist to make money, not to force woke government policy upon themselves and their industry––and affect a company’s ability to survive.
ESG can and will be utilized as a tool to exclude or penalize companies that do not align with a particular progressive agenda. This will result in a bias that favors companies with specific environmental, social, or governance priorities that mirror progressive values. Specific examples of this are forcing a company to have certain sexual orientation and ethnic groups represented in its Board of Directors and certain pro-abortion policies for its workers.
You can listen to the full conversation here: