Democrats Support ESG in Letter to Key Lawmakers

Democrats Support ESG in Letter to Key Lawmakers

The memo comes amid growing criticism of the strategy.

Reviewed by: Zoya Mirza
Edited by: Zoya Mirza

Democratic attorneys general from 16 states and the District of Columbia sent a letter to lawmakers Monday promoting the consideration of environmental, social and governance factors—an investment strategy that has generated heavy criticism from Republicans in recent months.  

The letter likened ESG investing to “any other material factors—such as supply chain concerns or changing interest rates—that inform investment decision-making” noting that including such guidance does not “sacrifice pensioner retirements to further a political agenda.” 

The “ESG” label has become a polarizing topic amongst politicians, asset managers and investors alike. However, despite accelerating pushback against sustainable investing, recent studies have found growing demand for the products. A report published by Morningstar in October found that sustainable products attracted $459 million during 2022’s otherwise dismal third quarter, which continued to battle high inflation, rising interest rates and recession fears.  

The memo also called out Republican claims that ESG is “inconsistent with prudent investing,” a sentiment previously expressed by GOP attorneys general in a letter on Aug. 4. That letter specifically criticized BlackRock—the largest issuer of exchange-traded funds in the U.S.—for not doing its fiduciary duty, and for using investor money to push a “climate agenda.” 

Despite a challenging economy, sustainable funds grew by 0.16% in the third quarter whereas U.S. funds overall shrunk by 0.38%. Progress in sustainable investing, even during a period of extreme market volatility, indicated that investor demand for such products is here to stay, according to the report. 

Sustainable ETFs that demonstrated top 10 fund flows in the third quarter included at least four ESG focused funds, including the iShares ESG Aware U.S. Aggregate Bond ETF (EAGG), the Nuveen ESG Large-Cap Value ETF (NULV), the Vanguard ESG U.S. Stock ETF (ESGV) and the iShares ESG Aware USD Corporate Bond ETF (SUSC), which generated flows of $193 million, $102 million, $92 million and $72 million, respectively.  

Contact Zoya Mirza at [email protected] 

Zoya Mirza is a markets reporter at Her work has appeared in USA Today, Voice of America, and United Press International, among others. Mirza is a graduate of Northwestern University’s Medill School of Journalism. Her past experiences include editorial work in book publishing and conducting political analysis for NGOs and think tanks. Mirza is a passionate bibliophile and collects vintage postcards from every bookstore she visits in a new city.