Red State Anti-ESG Laws Seen as Continuing Obstacle by Companies

Political backlash particularly at the state level remains a significant obstacle for corporations seeking to advance their environmental, social and governance policies, according to a new think tank study.

The findings released Wednesday come as at least 20 states have enacted anti-ESG legislation, including rules requiring that asset managers get consent from clients when investing in social objectives in Missouri and a law directing pension funds to prioritize returns without considering ESG in Florida. More than 60% of 125 companies surveyed in August 2023 by the nonprofit organization The Conference Board said that they expect political backlash to persist or intensify through 2025.

“Backlash is not a passing fad,” Andrew Jones, an author of the study, said. “It’s become part of the political landscape, and it has had tangible impacts on companies’ ESG and sustainability initiatives.”

• Firms are responding by sharpening their focus on the link between ESG and their core business values, according to the study.
• Less than half of the companies surveyed, however, said their ESG strategies are well-integrated into their firms’ activities.
• Half of consumers in a separate survey said they think corporations exaggerate the impact of their sustainability efforts.