Democrats push back against GOP's anti-ESG approach, urging asset managers to prioritize long-term investment decisions

Democratic state officials from New York to California sent letters to asset managers overseeing trillions of dollars in retirement funds, urging them to consider long-term effects of factors like climate change when making investment decisions. The request comes after Republican politicians attacked environmental, social, and governance investing, calling it a threat to capitalism. The Democrats say the Republican approach puts American retirement money at risk and misrepresents the true meaning of fiduciary duty.

Democratic state officials from New York to California have sent letters to asset managers overseeing trillions of dollars in retirement funds, urging them to consider the long-term effects of factors such as climate change when making investment decisions [1]. This request comes in response to Republican politicians' attacks on environmental, social, and governance (ESG) investing, which they view as a threat to capitalism. The Democrats argue that the Republican approach misrepresents the true meaning of fiduciary duty and puts American retirement money at risk.

The letters, sent to at least 18 fund managers including BlackRock Inc., State Street Corp., and T. Rowe Price Group Inc., request that investment firms commit to thorough evaluations of risks tied to global warming, supply chains, and corporate governance. They argue that a passive approach to oversight, as advocated by the Republicans, is shortsighted and fails to create long-term value in modern capital markets.

Maryland State Comptroller Brooke Lierman and California Controller Malia Cohen, among others, emphasized the importance of active oversight to hold companies and asset managers accountable for all types of investment risks. They noted that ignoring risks related to governance, climate, or supply chains is not neutrality, but negligence.

Protecting the financial interests of workers, retirees, and taxpayers requires exercising active oversight and engaging with companies to deliver durable, risk-adjusted financial returns over the long term, state officials wrote. They asked asset managers to respond by September 1 and to meet with their offices to reaffirm their commitment to responsible investing.

This coordinated Democratic campaign is one of their most-concerted public efforts yet to counter Republican attacks on ESG investing. It follows a Republican group's warning to financial firms to end so-called "woke" investing programs that focus on social and political agendas. New York City Comptroller Brad Lander, who sent a notice to firms managing money on behalf of city pension funds, emphasized that neglecting long-term risks for short-term gains is not fiduciary responsibility.

The Democratic letters come as Procter & Gamble (P&G) is transforming its procurement strategy to help people practice more sustainable efforts and aims for net zero emissions by 2040 [2]. P&G's climate initiatives, including partnerships with suppliers and consumers, demonstrate the potential for businesses to influence change in the procurement sector.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-21/democrats-say-retirement-dollars-at-risk-from-gop-s-anti-esg-approach
[2] https://procurementmag.com/news/how-is-procter-gamble-reshaping-supply-chains