House Republicans passed multiple pieces of legislation this week aimed at targeting environmental, social, and governance (ESG) policies, which they argue divert focus away from financial returns. ESG is a financial model that prioritizes environmental and social considerations alongside profit, a practice that has gained traction in recent years.

The legislation was part of a broader Republican effort -- supported by former President Donald Trump -- to curtail what lawmakers consider to be "woke" policies in finance, education, and other sectors, and the push is seen as preparation for more significant changes should the GOP secure control of both chambers and the presidency, as the Washington Examiner reports.

Three Key Bills Target 'Woke' Policies

During what has been labeled "woke week," the House passed three major bills. The first, the “Protecting Americans’ Investments from Woke Policies Act,” sponsored by Rep. Rick Allen (R-GA), is a direct response to a Biden administration Labor Department rule that allows fiduciaries to consider ESG factors in investment decisions. The bill narrowly passed, 217-206, with three Democrats voting in favor.

The second bill, the “End Woke Higher Education Act,” introduced by Rep. Burgess Owens, seeks to amend the Higher Education Act of 1965. This bill would enforce First Amendment principles and prevent partisan influence on accreditation processes in higher education. It passed with a 213-201 vote, again with a few Democrats joining Republicans.

Finally, Rep. Bill Huizenga (R-MI) introduced the “Prioritizing Economic Growth Over Woke Policies Act,” which limits the Securities and Exchange Commission's (SEC) authority to require corporate disclosures related to climate and social goals. This bill passed with a 215-203 vote, with three Democrats siding with Republicans.

GOP Criticizes ESG for Hurting Financial Returns

Republicans argue that ESG policies take the focus away from what they consider the primary goal of financial systems: maximizing returns. "There is no room for ESG when considering how to invest Americans’ lifesavings," said a spokesperson for Americans for Tax Reform.

In their view, prioritizing social and environmental considerations leads to lower returns and does not serve the interests of average Americans. For Republicans, this week’s legislative efforts are a way to protect individuals’ investments from what they see as misguided policies.

Efforts Extend to Higher Education and Corporate Disclosures

Beyond finance, House Republicans also took aim at higher education through the “End Woke Higher Education Act.” According to Rep. Burgess Owens, this legislation is a “major victory for academic freedom,” targeting accrediting bodies that he claims have pushed diversity, equity, and inclusion (DEI) agendas onto colleges and universities.

Similarly, the SEC-targeted bill introduced by Rep. Huizenga is intended to protect businesses from what Republicans call unnecessary regulatory burdens. "These misguided ESG efforts don’t benefit our banking system or capital markets," Huizenga stated during the bill’s introduction.

The White House Opposes the Legislation

Unsurprisingly, the White House has expressed strong opposition to all three bills. The Biden administration argues that these measures would restrict the ability of fiduciaries to make informed decisions regarding retirement plans. It also contends that the education-focused legislation would undermine colleges’ ability to promote diversity and maintain control over their accreditation standards.

In relation to the SEC-focused bill, the White House has said that limiting the agency's authority would undermine its ability to regulate corporate disclosures effectively, which would, in turn, negatively impact stakeholders and investors.

State-Level Efforts Against ESG Policies

The House’s legislative actions align with similar efforts at the state level, where GOP officials have been leading initiatives to counter ESG practices. For instance, Mississippi Secretary of State Michael Watson and West Virginia Treasurer Riley Moore have taken steps against financial institutions they accuse of prioritizing social goals over economic performance.

These actions at the state and federal levels are part of a broader Republican push to diminish what they see as "woke" influence in critical areas of American society, particularly where financial and educational interests intersect with political agendas.

Republicans Continue Focus on Legislative Agenda

The recent anti-ESG measures come on the heels of a series of legislative efforts Republicans dubbed "China week," where they sought to address perceived threats from the nation’s growing global influence.

Now, with ESG in their crosshairs, the GOP aims to continue its momentum in shaping U.S. policy on both domestic and international fronts.

Conclusion: Republicans Targeting 'Woke' Policies

House Republicans have passed several pieces of legislation aimed at limiting ESG practices in investment, education, and corporate regulation.

The three bills, focusing on investments, higher education, and corporate disclosures, are part of a broader GOP effort to counter what they see as harmful "woke" policies.

While these measures have passed in the House, they face opposition from the White House and are unlikely to move forward without further political negotiation.

At the state level, Republicans are also taking action against ESG, underscoring the party's focus on these issues across multiple fronts.