As many large companies and investors ease off of environmental and social governance (ESG) policies and investment vehicles, it’s time for elected officials on the left and right to back away from these hot-button issues and focus on actually helping taxpayers. That’s according to new polling data that my organization, National Taxpayers Union, just released that shows voters don’t want government officials injecting their own political views when making important decisions about how to spend taxpayer dollars.
These results may come as a surprise to some – especially given the amount of attention that ESG policies have received lately. For instance, there has been a big fight in the courts and public arena over a Biden administration regulation that opens the door to pension plan administrators using ESG factors when making investment decisions. Or on the Republican side of the coin, Gov. Ron DeSantis of Florida has earned a great deal of attention over high profile culture war fights with Disney.
While these conflicts might make for good headlines, they aren’t necessarily good for taxpayers. Misguided laws heap enormous costs onto the shoulders of taxpayers. This has happened for years in blue states, such as efforts to divest public pensions of certain companies’ stock, which cost retirees billions in California. More recently, this is what is happening in red states, as evidenced by recent studies in Oklahoma and Texas that show their anti-ESG laws are costing taxpayers hundreds of millions by blacklisting certain companies and driving up financing costs for municipal bonds.
But headlines aside, voters aren’t buying it. They say they want politicians to butt out of these polarizing debates. Our polling data show that more than 90 percent of voters believe that state government officials shouldn’t use taxpayer dollars to push their own political agendas. Nearly 70 percent of voters – with strong majorities of Republicans, Democrats and independents – believe that governments should not “blacklist” companies that have ESG policies. And 70 percent of voters realize that when you prohibit some companies from doing business with the state, you inevitably drive up costs.
ESG issues will probably always be a major topic of contention. Everyone has their own views – and sometimes very passionate opinions – on these topics. But that doesn’t mean that elected officials and bureaucrats should put their thumbs on the scale when it comes to making investment decisions that could affect millions of retirees or driving up the cost of state contracts and forcing municipalities to cover these costs with higher taxes.
Whether pushing for or against ESG, these efforts create additional problems for taxpayers. For instance, if public officials are able to steer government contracts away from companies they don’t like, they could, in turn, direct public funds to companies that they hold in higher esteem. This should invite a tremendous amount of concern about unethical behavior.
Rather than allowing political factors to enter the decision-making process, the interests of taxpayers should be the North Star. That’s not only the right path for ensuring that the government remains as lean and efficient as possible, not coincidentally, it’s also what voters want.
