Virginia Gov. Glen Youngkin (R)—who worked for most of his career in financial services (private equity), where he eventually became co-CEO of the Carlyle Group— signaled last week that he, like many of his Republican colleagues, has some concerns about ESG:

“Virginia Governor Glenn Youngkin, who ran one of the nation’s biggest investment firms before he took office, said ESG investing is under fire because it has morphed from a philosophy for picking stocks into a weapon for penalizing companies that don’t make the cut.

“‘Is having world-class transparency and governance a good thing? Yes, it’s a really good thing,’ Youngkin, a Republican and the former co-head of Carlyle Group Inc., said during a Bloomberg News editorial board meeting on Monday. But the definition of what’s good for the environment, social goals and governance isn’t one-size-fits all, he added.

“ESG ‘means different things to different people. It just does,’ Youngkin said. Amid this swirl of criteria, he continued, investment firms are telling companies, ‘If you don’t do X, then we’re going to penalize you, as opposed to just not invest with you.’

“At the end of the day, the economics of returns should justify the investment decisions, Youngkin said.”

Most government activity supporting or opposing ESG investing has taken place in states with Republican or Democratic trifectas. Virginia has a divided government with a Republican governor and House of Delegates and a Democratic state Senate.

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