Committees in the Kansas House and Senate this week approved competing versions of anti-ESG legislation, and the two chambers could debate them as early as next week. ESG stands for environmental, social and governance and those considerations have become part of the leftist agenda being promoting by Democrats at both the state and federal levels.
The Kansas Senate's version of the anti-ESG measure would require private money managers to get their clients' written consent before investing their funds along ESG principles. The House bill contains no such provision.
The issue of requiring managers of private funds to disclose their ESG activities to clients or to get clients' verbal or written consent to use them appears to be the last major sticking point among Republicans in the GOP-controlled Legislature. They've already backed off the toughest version of the anti-ESG legislation because of opposition from powerful business groups.
A desire to thwart ESG investing has some Republicans breaking with the party's longstanding aversion to tougher business regulations.
“We have labels on our food,” said state Rep. Michael Murphy, a Republican from rural south-central Kansas who backed the strongest anti-ESG legislation. “We could look at it and say, ‘Well, I don’t want that, and I’ll take this over here.' It allows you to make that choice, and that's all this is.”
Utah's Republican state treasurer recently told a GOP gathering that ESG “opens the door to authoritarianism” and is “Satan's plan.” On Thursday, 19 GOP governors, including Ron DeSantis of Florida and Kristi Noem of South Dakota, issued a joint statement calling ESG a "direct threat to the American economy, individual economic freedom, and our way of life.”
In Kansas, newly elected GOP Attorney General Kris Kobach and Republican State Treasurer Steven Johnson back anti-ESG measures, but they've argued that allowing the investment of state funds using ESG principles threatens to reduce the state's investment returns. Kobach has argued for an informed consent requirement for private money managers as a consumer protection measure.