Opinion: The answer isn’t ESG. It’s CSR
America’s economic system of free enterprise allows businesses to develop the best ideas to solve big challenges, become industry innovators and create governing structures that best fit their organizations. Government plays an important role in the free market, ensuring a level playing field and that “rules of the road” are followed. In this way, the private sector marketplace is vibrant, opportunities expand and communities prosper.
Utah’s success over the past two decades as the strongest and fastest-growing economy is proof this approach works. Yet, the Utah model and free enterprise itself are at risk from the current political push for federally mandated environmental, social and governance (ESG) rules. Should this politicization of business succeed, unintended consequences will surely follow.
Free markets facilitate the opportunity for a business to be both environmentally responsible and financially successful. The Utah business community has been contributing to environmental improvement and social impact for a long time. This demonstration of corporate social responsibility (CSR) is a critical part of the good things happening in our state. And none of it required federal overreach with ESG mandates.
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CSR is very different from ESG. With corporate social responsibility, free markets are supported and expanded. With ESG, free markets and the competition of ideas are undermined as there is no longer tolerance for discussion, difference or choice. For example, with CSR, an energy company can pursue carbon reduction because it views renewable energy transition as smart strategy for its customers and shareholders. Under ESG, the nameless, faceless bureaucracy (or worse, a political appointee’s personal agenda) determines when, where and how much an energy company will operate (or not).
The debate around federal ESG mandates continues to grow as it begins to look more like a market engineering process driven by a political agenda to assert control over markets, businesses and consumers. If driven to its (il)logical conclusion, this would cast a political lens over everything we do, remove the invisible hand of the market and replace it with a fist on one side of the scale of commerce.
The business community has long supported corporate social responsibility and stands opposed to federally mandated ESG and its harmful impacts on capital access, supply chains, product pricing and innovation. We are equally opposed to state overreach that punishes corporate social responsibility and alters the market by exerting politics into commerce. State government should not penalize businesses for voluntarily adopting goals and initiatives to improve the environment and increase opportunity for all.
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What the Utah business community needs from state leaders are efforts to remove the fist of the federal government off one side of the scale, not another fist on the other. Our state legislators have served Utah well for decades by letting markets work, taking a limited government approach, keeping taxes low and regulations reasonable, and allowing Utah to be a fertile field for jobs and opportunity.
The Salt Lake Chamber will continue to support and defend free enterprise and Utahns who are working hard to make a living and take care of their families, and who already have enough political agendas being pushed upon them without workplaces becoming an ideological battleground divided by support for or opposition to ESG today, and who knows what else tomorrow. As long as Utah remains a bastion of free enterprise, where choices are made with one’s money and feet, then we will continue to be the economic promised land, where opportunity and prosperity abound.
Derek Miller is the president and CEO of the Salt Lake Chamber.
