Woke investing is a hot topic as of late. It's been the subject of heated debate in both the political and financial arenas, as well as among individual investors. On one side are those who believe in the merits of environmental, social and governance (ESG) investing, which prioritizes investments that focus on sustainability, social responsibility and corporate governance. On the other side are those who view ESG investing as a “woke” movement that pushes a political agenda.
Now, the debate has spread to the halls of Congress. In the latest in a series of efforts by Republicans to stop what they call “woke” investment decisions, the Senate overturned a federal rule that would have required retirement plans to consider ESG criteria when investing. The bill, which was supported by President Biden, was a victory for critics of ESG investing, who argued that it restricts investors’ choices and forces them to invest in businesses that share the same “woke” values.
But what does this mean for investors? It’s important to understand the implications of this debate and how it could affect your investments.