TEA TIME — Leaders of the U.S. campaign against environmental, social and governance investing descended on London this week looking to spread their “anti-woke” gospel and spur a similar movement on the other side of the Atlantic. Republican presidential candidate Vivek Ramaswamy and State Financial Officers Foundation CEO Derek Kreifels were among those gathered for the inaugural conference of the newly-formed Alliance for Responsible Citizenship, along with other U.S. conservative luminaries including House Speaker Mike Johnson, former Speaker Kevin McCarthy and Sen. Mike Lee (R-Utah), some of whom appeared virtually. Kreifels said in an interview that he hopes the gathering of anti-ESG advocates helps nudge folks in the U.K. to “pick up the mantle” and lay the groundwork for a strategy pushing back on this kind of investing. “Absolutely, this is about sharing what’s working. We’re winning. We’re creating pause in the industry,” Kreifels said in an interview. “There's already a lot of leaders who have already figured this out — that ESG is a losing proposition. This is going to be an opportunity to give voice and cover to those who may have felt like they were on an island believing that.” The London conference comes at a pivotal moment for U.K. climate and energy policy — one that anti-ESG crusaders see as presenting a path to grow their movement. U.K. Defense Secretary Grant Shapps warned in September that ESG considerations were undermining investment in the nation’s defense sector at a time of heightened security concerns. That same month, Prime Minister Rishi Sunak rolled back key climate targets ahead of next year’s elections. And in July, the private bank and wealth manager Coutts was accused of pursuing a “woke” capitalist agenda after it decided to close an account belonging to former Brexit campaigner Nigel Farage. Ramaswamy, who appeared virtually, told the London audience that European companies have suffered financially from not focusing solely on maximizing shareholder returns — and cast the issue as one in which a few corporations undermine democracy by imposing their market power to achieve societal changes not approved by the government. “My impression is that they are as thirsty for pushback on the ESG movement as here in the United States,” said Will Hild, the head of the Leonard Leo-supported anti-ESG group Consumers’ Research. If that is the case, it’s not so clear to those on the ground. Emma Wall, head of investment analytics and research at U.K. financial services firm Hargreaves Lansdown, said that even though the country has seen a recent trend of money being pulled out of ESG funds, it doesn’t yet indicate a backlash. And even as ESG has seeped into politics, “the language is far less inflammatory” than in the U.S. With U.K. elections looming, the next two years “will be key in identifying whether there has been a backlash as has happened in the U.S. or whether what we are seeing is just that frothy money leaving,” Wall said. It’s even less clear whether an anti-ESG movement would spread across Europe given the U.K.’s relative isolation from the continent after Brexit. Brussels is on a regulatory tear, going full steam ahead on thorny issues such as green bond issuance and requiring businesses to disclose their climate, biodiversity and water impacts, ensure their supply chains aren’t contributing to deforestation and make more of their packaging recyclable. Some advocates, like Jason Isaac, founder and CEO of the American Energy Institute and a distinguished fellow at the conservative Texas Public Policy Foundation, concede that the European context offers plenty of hurdles for those hoping for an anti-ESG wave. But Kreifels said he was energized by the audience's enthusiasm, saying he received 30 or 40 private messages after his session from inspired conference attendees hailing from Britain, Poland, Germany and Brazil. "We're going to continue to foster model policies that will be hopefully seen into legislation," he said. "We'll work with our partners like ALEC and the Heritage Foundation and other friends to continue to push together, and we'll give support now to other little organizations that are popping up around Europe that are starting to push back against the ESG movement."
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