Scholars examine a shift in conservative legal thought away from libertarian deregulation.
Scientists have long warned of the enormous risks climate change poses to the environment. But is climate change bad for business, too?
Many business leaders think so. In recent years, some companies and financial institutions have embraced strategies to reduce the impact of climate change on their profits and investments. In response, many state legislatures have passed so-called “anti-woke capitalism” laws—statutes meant to restrict the decision-making power of businesses and investors that purportedly express progressive views.
In a recent article, Amanda Shanor and Sarah E. Light of The Wharton School of the University of Pennsylvania examine the rise of anti-woke capitalism laws and their constitutional implications. Shanor and Light argue that these laws demonstrate a significant pivot in conservative legal thought away from libertarianism and toward identity-based regulation of economic activity. They suggest that this trend may foreshadow a similar shift in conservative free-speech law.
Shanor and Light focus their analysis on anti-woke capitalism laws that target “private environmental governance”—a management strategy in which firms integrate environmental or climate-related factors into decision-making. Firms use this strategy for a range of reasons. For example, some wish to influence environmental policy seen as inevitable by taking a pioneering role. Others hope to avoid market disruption and property damage from environmental disasters caused by climate change. Many also want to prepare for anticipated environmental regulation, making future transition and adaptation less costly.
In response, many state legislatures have passed laws preventing governmental organizations from doing business with or investing in firms that have adopted private environmental governance. Shanor and Light explain that anti-woke lawmakers often group private environmental governance with other “woke” management strategies that address concerns related to “social issues of consequence,” such as guns, abortion, race, LGBTQ+ rights, diversity, and school curricula.
Shanor and Light note that anti-woke capitalism laws are part of a broader debate about the relationship between firms, their shareholders, and other stakeholders. Shanor and Light suggest that these laws often reflect the idea that maximizing shareholder profits should categorically exclude environmental considerations.
Likewise, many anti-woke lawmakers provide that business actions based on environmental decisions, such as declining to invest in fossil fuels, violate a firm’s fiduciary duties. Shanor and Light assert, however, that private environmental governance is often “consistent with … shareholder-centric views.” In addition, firms that adopt private environmental governance maintain that they are “simply considering long-term risks in the allocation of capital,” as they normally would.
Shanor and Light argue that anti-wokeism marks a major turning point in the conservative legal movement toward “identitarianism”—the view “that law should protect and advance a single cultural identity to the exclusion of other identities, other values, or pluralism.”
They emphasize that anti-woke capitalism laws are incompatible with the laissez-faire, pro-business, and deregulatory positions once dominant in conservative legal thought. “Far from libertarian,” Shanor and Light claim that anti-wokeism instead aims to restrict and interfere directly with private business judgments, risk assessments, and decision-making—“even if done for profit-seeking reasons.”
Although Shanor and Light are careful not to suggest that anti-wokeism signals the end of libertarian law and policy, they predict that anti-woke capitalism laws may hasten the already declining use of the Speech Clause as a conservative deregulatory tool.
As Shanor and Light explain, under prevailing free-speech doctrine, “regulations motivated by a governmental aim of silencing certain ideas or quashing social or intellectual movements, including consumer boycotts, are generally unconstitutional.” Many anti-woke capitalism laws seem to match these criteria. Either explicitly or implicitly, these regulations appear to target “woke” ideas, according to Shanor and Light.
In addition, whether firms intend to communicate any message—“woke or otherwise”—through their business considerations holds no relevance under free-speech doctrine. As Shanor and Light clarify, the key issue from a constitutional perspective is “whether the laws are anti-woke”—that is, designed to suppress specific ideas and their expression, regardless of whether the targeted firms “are in fact woke” or have any expressive motives at all behind their investment or lending decisions.
The constitutionality of a law that regulates free-speech often hinges on the motivation and governmental interest behind it. Consequently, Shanor and Light reason that legislators and government actors who write and advocate anti-woke capitalism laws “in the most identitarian and partisan-oriented fashion” may inadvertently be putting these laws in constitutional jeopardy.
