Vice Chair Monica De La Cruz (TX-15) condemned ESG mandates as a tool of cancel culture and market distortion during a heated hearing on insurance and housing costs. Her remarks ignited a debate on the implications of imposing ESG requirements on businesses.
In a fiery session at the House Financial Services Subcommittee on Housing and Insurance, Vice Chair Monica De La Cruz (TX-15) delivered a scathing critique of ESG (Environmental, Social, and Governance) mandates, calling them a modern shakedown tool fueled by today's cancel culture.
The hearing, titled "How Mandates Like ESG Distort Markets and Drive Up Costs for Insurance and Housing," shed light on the controversial implications of imposing ESG requirements on businesses.
"Those that don't give in get pilloried and protested for having the audacity to focus their business on their business. Essentially, ESG is in many cases, a modern shakedown tool brought to you by today's cancel culture," De La Cruz stated passionately in her opening remarks.
She went on to criticize ESG as a form of virtue signaling, where companies can boast about their perceived enlightenment based on environmental, social, or corporate governance actions, even if it means disregarding their fiduciary duty to shareholders or compromising the value of their goods and services to consumers.
"ESG is a form of virtue signaling where companies can proclaim how enlightened they are based on their environmental, social, or corporate governance actions, even if they had to ignore their fiduciary duty to their shareholders or decrease the value of their goods and services to consumers. Those that give in to the ESG movement think that it will make their company more popular with progressive agitators," De La Cruz explained.
Addressing concerns about voluntary participation in ESG initiatives, De La Cruz highlighted the problem when ESG is imposed as a mandate rather than being offered as a choice.
"The problem comes in when ESG is not being offered as a choice, but as a mandate. ESG mandates, like so many other government mandates before it, are always offered up as harmless tweaks on the path towards social enlightenment, free from cost or ill-intent, that will make markets work better," she argued.
She further emphasized that ESG mandates distort markets, increase the cost of products, limit consumer options, create scarcity, and misalign investment capital, contrary to the intentions behind such initiatives.
"Made-up metrics, called 'ESG scorecards,' are created to determine which companies are in the good graces of left-wing activists. These modern-day social credit systems drive a wedge within open markets by directing investments to companies that satisfy progressives' demands" she said.
She expressed concern about the impact ESG scores could have on access to money.
"Your company's access to capital should not be dependent on being more woke than your competitor. The far left shouldn't be able to cancel your business if you don't comply," De La Cruz cautioned.
Concluding her remarks, she warned that ESG scores and mandates create a social credit system that makes life harder for American consumers, businesses, and retirees, without providing any discernible benefits.