After watching key GOP figures launch an all-out political attack on ESG, senior officials from the $57 trillion global pension industry are speaking out against the risks such an agenda poses to long-term savings.
Matti Leppala, chief executive at PensionsEurope, said efforts to lambaste ESG based on an assessment of short-term returns are "ridiculous" and "meaningless."
"We would argue that not taking ESG into consideration is in fact the real risk factor that will have an impact on long-term, sustainable returns," Mr. Leppala, whose association represents firms overseeing a combined $7 trillion in assets, said in an interview.
The testimonial follows a ban by Florida Gov. Ron DeSantis prohibiting state pension funds from screening for environmental, social and governance risks. The decision, announced in late August, marked the culmination of months of attacks against ESG, which Mr. DeSantis has painted as an anti-American, leftist scheme that hurts financial interests.
More than a dozen other GOP-led states have launched similar campaigns targeting ESG through different channels, such as the municipal bond market. Financial behemoths such as BlackRock also have been targeted individually for allegedly not doing enough to support the fossil fuel industry.
Brian Graff, chief executive of the American Retirement Association, said U.S. savers ought to be free to get ESG-integrated plans if that's what they want.
"We believe that, you know, American workers who are interested in investing in this area should have the option to do so," said Mr. Graff, who represents the interests of his association's more than 34,000 members. He also suggested that the debate around ESG has become riddled with confusion.