HCR 52: Federalism Committee to study the evils of ESG – 2022
ICL's position: Oppose
Current Bill Status: Dead
Issue Areas: Investment, Sustainability
HCR 52, introduced by Representative Barbara Ehardt (R-Idaho Falls), directs the Federalism Committee to study Environmental, Social and Governance (ESG) and bring legislation “that protects the State of Idaho and its citizens from the use of ESG standards.” HCR 52 makes many unfounded and inaccurate claims, such as “the widespread use of ESG standards by central banks, financial institutions, corporations, and governments threatens to restrict individual and economic rights and to usurp legislative processes, the Idaho Constitution, and the United States Constitution.”
What is ESG?
Environmental, Social and Governance (ESG) scores are a voluntary system for businesses to track and report on sustainability, transparency, and social responsibility. They provide a common framework for evaluating corporate governance and social impacts. They measure the impacts of companies and sometimes give a score for how responsible their business is, in an effort to prioritize social responsibility from corporations. Some businesses use ESG metrics to show their customers that they are making strides in sustainability, while some investors use them to guide investment decisions, promote transparency, and promote fair pay.
ESG reporting creates a way for companies to respond to customer demands – if shareholders want a company to become more environmentally sound, ESG scores can help track that progress. While this may sound like an easy and transparent way to show how companies are acting, not everyone is on board with ESG.
Some states, companies, and politicians oppose ESG because they fear that it represents a threat to their way of doing business.
Glenn Beck visited the Idaho Statehouse in February for a presentation on ESG, which he describes as “CRT (Critical Race Theory) on steroids.” In Beck’s energetic presentation, he told the group of legislators that everyone will eventually have an ESG score and that scores will be used to track individuals and businesses, ruining business opportunities in the process.
These conspiratorial statements have turned ESG into a boogeyman in the legislature, with several legislators touting the supposed dangers of ESG.