Iowa House Republicans recently passed a bill that would ban the state from contracting or banking with companies that consider environmental, social and governance impacts when investing.

In the past decade-plus, many of the world’s largest companies and investment firms increasingly have chosen not to invest money in sectors with which their clients are not comfortable. These sectors include those whose impacts to the environment or society are considered controversial, such as fossil fuels, industries such as mining or logging, large-scale agriculture, firearms or pharmaceuticals.

This practice has proven to be popular enough with clients that more major firms have adopted it over the years, and an entire industry has been created for scoring companies’ environmental, social and governance (ESG) pursuits.

Opponents, however, have decried ESG investing as “woke capitalism,” contending that firms’ focus should be on maximizing financial returns and that considering ESG impacts ends up putting a priority on political issues.

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