State AGs Renew Their Fight Against ESG

Towards the end of last year, attorneys-general from different GOP states filed an antitrust suit against investment firms linked to ESG initiatives, led by Texas. This trend continued into the new year, with opposition against ESG growing while opposition to Diversity, Equity and Inclusion programs also increased.

Just last month, another group of GOP state attorneys-general led by Attorney General Ken Paxton of Texas wrote a letter detailing contractual and legal violations by different financial institutions. In their letter, the attorneys-general called attention to the fact that financial institutions were violating their fiduciary duties by working towards their climate commitments instead of maximizing financial returns.

This included net-zero agendas and other environmental concerns focused on mitigating impact of climate change. They also argued that the use of sex and race-based quotas and the furthering of political agendas could breach state and federal laws. They gave the example of contract requirements in Texas banning sexual and racial discrimination and cited a Government Code provision that required fiduciaries to act only in the interest of beneficiaries.

Various state labor codes and the Civil Rights Act also forbid discrimination.

The attorneys-general also claimed that policies that govern diversity programs racially discriminated against others, citing employment quotas based on sex and race with numerical and percentage employment targets. These quotas, they explained, needed to focus on only maximizing the financial performances of these financial institutions.

Additionally, they insisted that vendor diversity programs could also be discriminatory as they focused on diverse suppliers. In their conclusion, they requested interviews of employees and answers to various questions based on representations made by these institutions on climate topics and diversity programs.

That same month, the Kansas and Iowa attorneys-general Kris Kobach and Brenna Bird penned a letter to Costco on their race-based hiring system and unlawful diversity policies. The letter, signed by 17 other GOP attorneys-general, warned the corporation of potential liability and cited recent cases filed at the Supreme Court on the same.

The AGs also gave examples of other companies they’d warned in the past about their DEI policies in the recent past and mentioned those that had since rolled back these programs. In their conclusion, they requested that the company notify them within thirty days if it had revoked the aforementioned policies or explain why it hadn’t.

Increasing pressure for companies to repeal these policies has already seen major corporations like Amazon, Meta, Pepsi and GM scrap some, if not all, references to DEI from their annual reports.

Despite these efforts to roll back the adoption of ESG, many companies, such as Energy and Water Development Corp. (OTCQB: EAWD), are determined to implement these principles within their operations since doing so delivers tangible benefits to the bottom line.

NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD

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