Auditor Sorrell: ESG social component a threat to US

Alabama Attorney General Steve Marshall recently summarized the problem of so-called
“environmental, social, and governance (ESG)” investing well, telling a congressional committee that “[a]n unelected cabal of global elites is using ESG to hijack our capitalist  system, capture corporations, and threaten hard-earned dollars of American workers.”

Or, as I recently said in an interview, “ESG is the new way of looking at business where we don’t care so much about how much profit they make, what we care about is how woke they are.”

States, including Alabama, have taken action to counter the very real threat posed by this “cabal of global elites.” In fact, our state is on the cusp of passing some of the most robust legislation in the country in SB261, which holds corporations accountable for their politicized actions by declining to do business with companies that boycott industries based on ESG criteria.

While much of the criticism of ESG investing rightly focuses on activists groups’ unfounded attacks on viable energy solutions like the fossil fuel, coal, and oil industries, the “social” component of the approach poses the more immediate threat to everyday Americans, including Alabamians.

This is something I’ve experienced firsthand as a business owner, as anti-gun politics has apparently driven a series of cancellations from essential services.

I’m part owner of Gold, Guns, and Guitars, a federally licensed firearms dealer in Florence. Like our competitors across the state and throughout the nation, we saw a strong financial year in 2020.

Alabamians were understandably concerned about the violent rioting of major American cities that seemed to take place on a daily basis, and many chose to exercise their Second Amendment right by preparing to protect themselves and their families.

But one day we received a letter in the mail. It was from the large national commercial bank that held our business credit card, informing us that it had closed our account.

Why?

The letter didn’t say. We had never been late on payments, and we had never received any form of advanced notice that anything was wrong or irregular with the account.

Rather than pressing for an explanation, which we knew would consume valuable time and energy that was better spent serving our customers, we promptly paid off the card. One credit card is as good as another, we figured, so we simply took our business elsewhere.

We’d put the matter behind us when, about a year later, we got a similar notice from our credit card processor, which was affiliated with a different national bank.

Again, we were given no explanation for the bank’s decision, and had to pivot to a local bank who was willing to take us on as a customer.

Finally, this May, we received a third notice. This time, our long-time insurance provider was declining to renew our coverage. While the company declined to say why it was booting us, our broker’s evaluation was that we were selling too many firearms and ammunition to suit our provider’s taste.

What happened to us is alarming, but we’re not an isolated case. In the past two years, for example, financial giant JPMorgan Chase has denied payments or cancelled accounts associated with people and organizations who hold mainstream American values such as former Ambassador Sam Brownback, the Arkansas Family Council, Defense of Liberty, and former general Michael Flynn Jr.

Letters from 14 state financial officers and 19 state attorneys general, including Attorney General Marshall, have called on Chase CEO Jamie Dimon to commit to protecting the freedom of every American to access essential services regardless of their political views.

But the problem isn’t isolated to Chase. According to analysis provided by the 2023 Viewpoint Diversity Score Business Index, the commercial banking industry averaged just a 12 percent score out of a possible 100 percent on their commitment to respecting diverse viewpoints in the marketplace.

If a bank is too big to fail, it’s too big for bias. State and federal governments grant banks and other financial institutions wide-reaching benefits to ensure everyone has access to essential financial services, not to wade into politics.

No American should have to worry that they will lose their bank account or have a payment declined because of their religious and political beliefs. If major financial institutions can’t stop discriminating on their own, legislators will have little choice but to stand between their constituents and the banks that threaten to cancel them for exercising their God-given rights.

Andrew Sorrell is the Alabama State Auditor.