‘Woke’ finance bills and the risks to academic freedom

By William Cook

The past year has seen a wave of attacks from Republican state governors and legislatures on so-called ‘woke’ investments in ESG-oriented funds by state institutions – nearly 200 bills across 37 states in 2023. ESG stands for environmental, social and governance investing, which republican lawmakers have targeted for its perceived promotion of a specific left-leaning political agenda under the guise of financial decision-making. Despite the increasingly dubious ethical value of an ESG label and the frankly laughable idea of mega investment companies like Blackrock having deep political and ethical alignments with genuine environmental and social justice activists, ESG investing has come into its own as a leftist boogeyman alongside critical race theory in the past few years. While many of these bills are still being debated, and their final form remains to be seen, alarms should be raised by language that often suggests full bans on state institutions (including universities) offering contracts to non-compliant entities – i.e. those that support an ESG agenda.


Indeed, we have good evidence of how such bills would filter down into higher education from an analogous set of bills across 38 states which targeted support for Boycott, Divestment, and Sanctions (BDS) against Israel. These bills have banned state institutions (including universities) from investing in or offering contracts to businesses or individuals who have committed to BDS measures, or indeed, refuse to sign an anti-BDS pledge. In some states, the focus has mainly been on large company contracts or investment decisions but in others, such as Arkansas, the threshold for consideration is very low, low enough to affect one-time jobs such as payment for speaking on campus. The University of Arkansas, for example, has now had two spats with campus speakers who were refused payment or speaking contracts based on this bill. Steven Feldman, a dermatologist from North Carolina was initially denied a $500 speaking fee for refusing to check the anti-BDS box on his contract, despite giving a medical lecture entirely unrelated to Israel. Perhaps even more troubling is the recent revocation of author Nathan Thrall’s invitation to speak on campus about his work on Palestine, again for refusing to sign a commitment to anti-BDS measures. Thrall’s case is also part of a widespread crackdown on campus pro-Palestinian speech, especially since Oct 7. However, it is important to note that this multifaceted attack is increasingly bolstered by explicit state law.


As ESG bills begin to get passed, similar, but more broadly targeted and ambiguous legislation, will need to be interpreted by already cagey university administrations, anxious to retain both public and private funding. While much of the discussion around these bills has focused on the cynical motivations of those passing the bills and those making political donations to them, the knock-on effects to higher education may be profound. At the moment, most bills aim to target larger companies and contracts (over $100,000) but others have very low (Iowa suggesting $1000 contracts) or vague thresholds (e.g. Michigan with no clear contract value limit). Other states target very specific subcategories of ESG, such as New Hampshire’s bill on blocking contracts with entities engaged in DEI initiatives (again with unclear contract values). As these bills begin to resolve into law, what kinds of challenges will universities have in not only vetting particular types of permissible campus speakers, but also in engaging with a range of organizations of various sizes? What kinds of research become unfundable under this new regime? How will these bills shape larger institutional goals in public higher education as universities are forced to deal only with an approved list of organizations and individuals deemed ‘not woke’? And perhaps most importantly, to what extent do these bills continue to strip away the capacity for universities themselves to operate as ethical agents?