The right’s anti-ESG crusader

How it works: ESG describes investors paying attention to financial risks related to "environmental, social and governance" issues.

• It covers investor responses to climate change, social movements and public campaigns for more diverse executive teams.
• Companies like BlackRock have paid more attention to ESG factors, amplifying pressure on large corporations to take steps like slashing carbon emissions.

Why it matters: Critics like Ramaswamy argue that focusing on such things goes against companies' "fiduciary duty" and unduly allows the biggest firms — without input from investors — to bring about economy-wide cultural changes.

• "The fundamental critique of ESG, both on the right and the left, is that there's this historic concentration of capital in the hands of a small group of investors," he told Axios. "Bernie Sanders has said as much, and I've said as much."
• “States, pension funds, treasurers, private institutions, large private corporate financial institutions … the system is so, I would say, captured by this one-sided dogma,” he said.
• “We will see whether it’s somewhere between difficult and impossible for us to be able to break into this line of business.”

Between the lines: Conservatives are embracing Ramaswamy.

• House Speaker Kevin McCarthy had Ramaswamy speak at House Republicans’ annual retreat last year.
• Rep. Dan Crenshaw — a leading anti-ESG voice — brought him onto his podcast and said “nobody is better” on this issue.
• GOP state officials have followed suit on Ramaswamy’s criticisms, from divesting pension funds to challenging ESG practices on antitrust grounds.

Zoom in: As Ramaswamy’s megaphone grows louder, his firm is approaching state officials to discuss its funds and proxy advisory consulting services.

• Emails obtained by watchdog group Documented and reviewed by Axios show Strive approached at least six states in the last year — Alaska, Missouri, North Dakota, South Carolina, Utah and West Virginia.
• In October, Strive told North Dakota officials it expected to soon have its first proxy voting consulting deal with one state pension system.
• In January, the firm disclosed its first proxy consulting deal with an “institutional client” worth more than $40 billion.
• The firm declined to identify the client, citing confidentiality. Ramaswamy also said his business hasn't gotten any pension fund investment yet.

• “The endgame is for [Ramaswamy] to profit, not to change corporate behavior,” said Jesse Coleman, a journalist and former Greenpeace researcher who now works for Documented.

The big picture: The ESG debate has a profit motive — no matter what side you’re on.

• BlackRock CEO Larry Fink explains that his firm’s ESG views are part of creating sustained value for its customers, meaning it seeks better returns for investors over the long run.
• This investment trend has its detractors. The SEC has gone after banks and companies for possibly misleading investors and the public over ESG claims.

The other side: Former Democratic Rep. John Delaney, who runs a low-carbon bank and asset manager, told Axios that advocates like Ramaswamy are taking “the intense rhetoric we have in the political world” to “effectively raise money by appealing [to] people’s tribalism.”

What he’s saying: Ramaswamy called these claims “comical” because he’s transparent about his business and worldview — that some of the world’s richest leverage capital to enact and profit from social change.

• “It’s funny how ticked everyone gets that somebody offers a slightly different perspective [of] trying to do the exact same thing,” he said. “Every asset manager has a profit motive.”

The bottom line: If you love Ramaswamy’s work, you probably think this is exactly what the GOP needs.