Andy Puzder was interviewed for this article which originally appeared on AMAC Newsline on June 12, 2023.
AMAC Exclusive – By Aaron Flanigan
With the left’s monthlong celebration of “pride” now well underway, corporations are once again brandishing their logos, social media pages, and advertising materials with the “pride” movement’s signature rainbow symbol. But after months of mounting conservative backlash to corporate wokeism, this year’s “pride month” is noticeably different—and the risk of boycotts, and even lawsuits, against left-wing corporations is higher than ever.
Despite conservatives’ intense resistance to corporate wokeism, most businesses have continued to beat the drum of leftism—and in some cases, they have doubled down on their support of progressive causes.
But according to a report released last month by the Committee to Unleash Prosperity, which examined the practices of several large investment banks, putting politics over profits may amount to a breach of companies’ legally-binding fiduciary duty to “earn the highest return possible for the tens of millions of retirees and other American savers.”
“Through a process known as proxy voting,” the report states, “these investment houses are supporting a leftist political agenda [that] goes by the acronym ‘ESG,’ which stands for ‘environment,’ ‘social,’ (also known as ‘social justice’) and ‘governance.’ It often encompasses other left-leaning priorities related to race, sex, and ethnicity. When these investment firms prioritize their political biases over company performance, their clients pay the price, in the form of lower shareholder returns that can easily add up to tens of thousands of dollars in losses per client.”
Of course, common sense would dictate that every company has a duty to maximize profit and increase shareholder value rather than giving hordes of money to left-wing political causes. As such, the findings in this report should be of grave concern to shareholders and others with a vested interest in companies’ profit maximization.
What, then, can Americans do to ensure companies are not breaching their fiduciary duty in the name of wokeism?
In an interview with AMAC Newsline, Andy Puzder, a senior fellow at the Heritage Foundation and President Trump’s first nominee for Secretary of Labor, said that legislation and litigation are the answers. Puzder is a member of a coalition of individuals and organizations that have been leading the effort to crack down on ESG investing.
Over the last year alone, 10 red states (including Utah, Kentucky, West Virginia, Arkansas, Montana, and Florida) have passed or introduced legislation that prohibits the consideration of social causes in corporate investment strategies and allows states to take back proxy voting authority from asset managers. Puzder says that number could soon reach as high as 25.
“For a year, I can’t think of a political movement that’s seeing that kind of legislative reception,” he said, noting that some states’ legislative packages have been stronger than others. Puzder pointed specifically to two pieces of anti-ESG legislation—the American Legislative Exchange Council’s State Government Employee Retirement Protection Act and the Heritage Foundation’s State Pension Fiduciary Duty Act—that have been models for state-level legislative initiatives over the last year.
Click here to read the full article.