Underneath the political back-and-forth over environmental, social, and governance (ESG) investing, we are seeing a sinister shift in targets. What began as a campaign among left-wing asset managers to blacklist and boycott fossil fuel companies has evolved into an exercise of political control over corporate investments. As a result, we are faced with a worrying strand of social justice vengeance that would blacklist any entity for voicing dissent against ESG practices. 

At the state level, blacklisting has become a reciprocal political tactic for controlling pension fund planning. Where red states like Oklahoma and West Virginia have blacklisted left-leaning asset managers for absconding their fiduciary responsibilities in favor of ESG, blue states like Illinois have barred financial professionals from becoming pension fund managers if they fail to incorporate ESG investment strategies.

A new report by the American Accountability Foundation (AAF) reveals how a coalition of politically active shareholders are advancing resolutions to name organizations deemed anti-ESG and shame their base of supporters. The report lists 46 organizations — think tanks, trade associations, advocacy groups — that have been targeted across shareholder proposals for vilification as ESG dissidents. According to the report, the endgame for this ESG blacklist is to produce a reactionary “chilling effect” that will “decrease membership in, and contributions to, any organization or individual that the left deems ‘incongruent’ with liberal orthodoxy.”  

The chilling effect from ESG blacklisting takes a page from infamous political organizer Saul Alinsky’s book Rules for Radicals. Rule #13 teaches one to “pick the target, freeze it, personalize it, polarize it.” A similar strategy is being pursued through ESG blacklisting by the combined efforts of a pro-ESG trio: the Corporate Reform Coalition, the Proxy Preview triad, and the Center for Political Accountability. 

Each group exercises a massive corporate lobbying advantage to advance a set of resolutions dissuading philanthropic support for ESG dissidents. Many of these resolutions pressure corporations to pledge support for certain ESG-centric causes. These include corporate net-zero pledges, anti-discrimination trainings, and diversity quotas. 

The Proxy Preview comprises three organizations: As You Sow, the Sustainable Investment Institute, and Proxy Impact. As You Sow is the most prominent and radical of the three groups, revered for framing the ESG shareholder agenda ahead of each proxy voting season. The organization spearheads the most effective environmental resolutions adopted by corporations and is heavily funded by George Soros’ Open Society Foundations.

The Corporate Reform Coalition comprises 85 loosely associated unions, nonprofits, and investors within the left-wing nonprofit group Public Citizen. Corporate Reform primarily heads the naming component of ESG blacklisting, enticing companies to disclose their political lobbying and philanthropic support activity. 

Lastly, the Center for Political Accountability (CPA) is a key player in the effort to force companies to disclose their political expenditures. CPA is described by Proxy Preview as the forerunner of advancing compulsory political spending disclosure resolutions. What began as a corporate accountability effort has rapidly devolved into an invasive opposition research drive, peering into a company’s paper trail in search for anti-ESG recipients. According to Proxy Preview’s 2023 release:

The initial focus was on board oversight and spending disclosure, but this started to shift significantly three years ago when proponents began to look harder at where company-connected money goes and whether the viewpoints of recipients clash with stated corporate environmental and social policies.

The Competitive Enterprise Institute (CEI), where I work, is one of the organizations targeted for blacklisting, according to the report. Two companies, Alphabet and Meta, are said to have given support to CEI (CEI respects the privacy of its donors and thus never confirms nor denies donations) and come under fire for the assertions of support.

Image credit: American Accountability Foundation and Advancing American Freedom

These naming-and-shaming campaigns are an assault on corporate philanthropy. Nonprofit organizations are now being savaged merely for expressing constitutionally protected views on ESG issues. This has fostered an unreasonable expectation for public companies to refrain from donating to any named group that refuses to embrace ESG orthodoxy. As a result, targeted groups are now more prone to becoming de-funded and ex-communicated by donors. 

The sinister ESG naming-and-shaming campaign must be exposed for what it truly is. As the report rightly warns of the “chilling effect against companies that make contributions to trade associations, right-of-center think tanks, and other advocacy organizations by forcing companies to disclose detailed lobbying and political spending data.”