ESG sceptics are scattered everywhere, but perhaps none are more visible than those in the US Republican Party.

ESG is about companies identifying material environmental, social and governance risks and opportunities in areas like climate change, biodiversity loss, labour standards and data security, as well as diversity and inclusion, LGBT rights and racism.

Already sceptical on climate change, many Republicans bristle at the idea of companies taking progressive positions on social issues.

Ignoring ESG issues is against the long-term interests of companies and shareholders. However, ambitious Republicans see short-term political advantage in calling for companies to do so.

The increasingly polarised US political landscape provides fertile ground for this. Many Trump Republicans see Democrats as being too focused on social (non-white, non-Christian) issues, and not representing them.

Florida governor, and presidential hopeful, Ron DeSantis is pitching to this crowd. Already a pinup boy for the anti-LGBT rights movement, DeSantis banned state fund managers from investing in companies or funds that make investment decisions on ESG factors, despite this increasing borrowing costs.

But DeSantis’ increasingly sceptical position on climate may have additional political consequences. Claiming that Hurricane Ian was a “one in 500-year event” ignores climate science and betrays his constituents.

Punching down on social issues is one thing. But maintaining public scepticism on climate change, in the face of the facts and the future, should become increasingly difficult. Even for US Republicans.

This article also appeared in The West Australian newspaper.

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