Fossil fuel companies were a major force behind the United States (US) state of Florida's move to stop banks and pension funds from investing in companies that prioritised environmental and social governance (ESG), new research from Griffith University found.
Associate Professor Erin O'Brien examined Florida Governor Ron DeSantis' political campaign, finding efforts to restrict public investment in ESG-aligned companies formed part of a wider national trend, with 18 US states adopting similar measures to limit the use of ESG principles in public investment decisions.
"Backlash to so-called 'woke capitalism' intensified when businesses began embedding ESG principles into core decision-making, and began to enact tangible social change," Associate Professor O'Brien said.
"This stands in contrast to DeSantis' claim that his party opposed 'virtue signalling', greenwashing, and the failure to prioritise financial returns.
"The research revealed the fight over 'woke capitalism' was less about investment strategy and more about who holds the power to shape the values and future direction of capitalist markets.
"The political trend to condemn values-based capitalism has worldwide implications by creating a legitimising environment for corporations to roll back their environmental and social commitments, and was seen most recently in BHP's decision to cancel plans to scale back high fossil fuel emitting projects to meet net zero targets."
The research found DeSantis' "war on woke" harnessed militarised language to elevate ESG into a high-stakes political conflict to justify state intervention in financial markets.
"Woke capitalism" was framed as a threat to "everyday people", and anti-ESG rhetoric constructed a divide between "everyday people" and "corporate elites", positioning ordinary citizens as victims of socially responsible investment.
Political leaders such as DeSantis and US President Donald Trump have increasingly reframed responsible investment as a threat to democracy, claiming corporate actors, or "martini millionaires", imposed their values without voter consent.
The research also identified the influence of fossil fuel companies and allied politicians who sought to prevent banks and pension funds from considering issues such as climate change and modern slavery when making investment decisions.
"The American Legislative Exchange Council, backed by powerful fossil fuel companies, drafted and disseminated anti‑ESG laws across the USA," Associate Professor O'Brien said.
"On one hand, DeSantis criticised ESG investment as extreme political ideology, while simultaneously using state power to impose their own ideological preferences on markets."
The paper 'The war on woke capitalism: State deployment of discursive power in the backlash to responsible investment' was published in Business and Politics.
