Midterm elections this week resulted in major wins for Democrats, positioning the party to take control of the House and Senate. Additionally, the party picked up multiple statewide positions, including a net positive of five governors’ offices and five attorneys general positions. How will these results impact ESG? Well, a recent Jenner & Block memo gives us a peek at the upcoming congressional priorities:
“Expect an agenda built around three prongs: corruption, costs, and care. House Democratic Whip Katherine Clark (D-MA) has described the party’s focus as lowering costs, protecting health care, and holding the “crooks” accountable, setting up Democrats as the answer to Republican ‘chaos and corruption and cruelty.’ Clark has also said a Democratic House would still work with the White House where it can, meaning hearings and investigations will run alongside cost-focused legislation rather than replace it.”
Notice that ESG didn’t get a mention. That isn’t necessarily a bad thing. At this juncture, the less ESG is politicized, the better. However, corporate sustainability doesn’t have to be on Congress’s agenda to feel the impacts of a change in power. While the election results don’t propel ESG forward, they do mark a relief in anti-ESG pressure. With control of the House, we can expect anti-ESG probes and subpoenas to grind to a halt.
Beyond Congress, this election dealt a major blow to anti-ESG litigation by state attorneys general. Texas has been spearheading anti-ESG litigation through its former AG Ken Paxton. Other states often emulated Paxton’s office, waiting until Texas filed a lawsuit and bringing similar lawsuits of their own. With Democrats in control of the Texas AG’s office, many pending suits will likely be dropped, and fewer will be brought nationally. This leaves Florida as the anti-ESG heir apparent on the state level. Overall, sustainability professionals can breathe easier, though we shouldn’t expect any federal regulation or legislation on ESG anytime soon.
Our members can learn more about anti-ESG here.
