New Hampshire Republicans propose prison for investing state funds with ESG criteria

The bill suggests penalties of up to 20 years for using environmental, social and governance guidelines, and follows in the footsteps of other initiatives taking aim at ‘woke capitalism’

Members of the New Hampshire House of Representatives listen to the national anthem before a session, in December 2022.
Members of the New Hampshire House of Representatives listen to the national anthem before a session, in December 2022.Holly Ramer (AP)
Miguel Jiménez

Investing with environmental, social and governance criteria (known as ESG) has become one of the fronts of America’s culture wars. Among many investment managers, those initials have become fashionable in recent years. Numerous companies, first American and then from around the world, have embraced sustainability and governance criteria in their management. However, this has caused a backlash. The Republican Party has launched an offensive against the use of such guidelines in investment decisions involving state funds because it considers it to be progressive political activism. The latest step is a bill registered in the New Hampshire state legislature, based in Concord, in which three lawmakers propose that, in certain cases, the use of ESG criteria should be punished with penalties of up to 20 years in prison. The bill sponsors are aware that their proposal is somewhat provocative.

The bill prohibits using ESG criteria to guide the investment of state funds from the New Hampshire State Treasury, executive branch agencies and the state retirement system. One of its provisions states: “It shall be a crime punishable by not less than one year and not more than 20 years in prison to violate the provisions of this section by knowingly investing state or taxpayer funds in a manner that violates the duty fiduciary in relation to environmental, social and governance (ESG) criteria.”

One of the sponsors of the bill is Republican Representative Travis J.I. Corcoran, who said that he normally does not respond to journalists because the American media “does not care at all about truth, but serves as an apologist / propagandist for the American deep state,” but that he would give EL PAÍS “the benefit of the doubt.”

Corcoran argues that “It’s simple math/statistics/logic that if you narrow your selections in some space (house hunting, adopting a dog, picking a stock fund) that the more criteria you add, the fewer choices you get, and the less likely you are to get the best choice for your primary criteria,” in this case, profitability. “If we’re looking for the best violinist in the world, and then decide to narrow our search to left-handed Albanians, we MAY get lucky and still find the absolute best [on the off chance that the best just happened to be a left-handed Albanian], but almost certainly we will find that we’ve discarded the top dozen best choices.”

“That may or may not be a problem if we’re recruiting for an orchestra (is there really a big difference between the best violinist in the world, and the 25th best one?), but when it comes to finances, the distinctions between first, fifth, and 300th place are clear, and are measured in dollars and cents,” he continues, noting that the difference between investing in the best fund on the market and investing in the best one managed with ESG criteria will end up producing a “huge gap that must be made up by the taxpayers,” according to Corcoran, a representative of a Hillsborough County district.

“Why should New Hampshire taxpayers have to pay insane amounts of money just to subsidize the luxury beliefs of the credentialed-but-not-actually-very-smart chattering classes? These beliefs, as expressed in ESG rules, encode silly ideas like ‘firms must have a certain number of women on the board’ (even if there are not many women in the world qualified in the specific area that the company does business) and ‘discriminating against white men in hiring and promotion is beneficial and morally good’.”

Mike Belcher, another co-sponsor, argues along the same lines and says that “ESG investing must be prohibited with state-managed funds because the practice necessarily causes earnings to be lessened by prioritizing criteria other than financial gains. As such, ESG is akin to fraud in that these forgone earnings are instead leveraged for social and political activism. Fraud is a felony offense, and this practice should be treated the same.”


When Corcoran is asked if he sees the need to impose prison sentences, he answers: “Is it necessary? No. Hilarious? Absolutely” and discusses his international references: “Javier Milei, president of Argentina, or, as I like to think of it, The New Hampshire of South America, has demonstrated the utility of drama, passion, and good stagecraft,” he says. “While I leave my actual chainsaw in my barn, instead of taking it to the New Hampshire statehouse with me, there is absolutely a place for rhetoric, drama, and humor in the political process,” he notes, implicitly admitting that his proposal is somewhat provocative.

Still, he is convinced that the bill will be approved, although not necessarily in 2024. Corcoran says that the idea is to expand Overton’s window of acceptable political discourse, alluding to Professor Joseph Overton’s theory representing the ideology acceptable to the public as a narrow window, and which maintains that the political viability of an idea depends on whether it is within the range considered acceptable. “The political class may laugh at my co-sponsors and I, but the idea of making it criminal for people who can’t use a reverse polish notation calculator to make investment decisions based on intuitions and vibes is a good one.”

Whether approved or not, the proposal is an example of how for most Republican politicians, ESG criteria are a way to impose a progressive agenda through the back door. The important thing for them is to maximize profit and everything else is woke capitalism nonsense.

The Republican governments of Florida, Texas, Louisiana and South Carolina have already punished investment firms for embracing those criteria. More than a dozen Republican states are promoting anti-ESG laws to prevent public funds from being managed using these criteria or from contracting out to companies that apply them in a way they consider discriminatory.

Vivek Ramaswamy, who was one of the Republican presidential primary candidates, made the fight against woke capitalism and ESG criteria a key issue of his campaign. Ramaswamy bowed out of the race after his disappointing results in the Iowa caucuses and has now endorsed Donald Trump, who espouses a similar view.

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