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The Biggest Social Issues to Watch in 2023

Republican and Democratic legislators can be counted on pulling in opposite directions on ESG investing, police reform and LGBTQ issues, where the focus will be on transgender rights and school curriculum.

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Editor's note: These social issue briefs originally appeared in our annual Issues to Watch, which was published on Jan. 10. You can read the entire article here.

Corporate Social Justice

A surprisingly important political theme in 2022 was the state-led backlash against “ESG investing” — the investment strategies that stress environmental, social and corporate governance factors in addition to financial performance. The group of practices that make up ESG have fairly long histories and have been known by other names. Those include socially responsible investing, in which investors buy shares in companies that promote good social outcomes and avoid giving money to others — for example, tobacco companies — that they see as a social detriment.

It’s only in the last few years that social justice investing has become more contentious, especially as it relates to managing public funds. The controversy is tied to growing activist movements, including the climate justice movement, which has called for an end to fossil fuel burning and urged divestment from oil and gas companies. Some big private investors, including BlackRock, have made statements declaring sustainability a key goal in their investment strategies. And while it’s not always clear how much those investment decisions affect real-world environmental or social outcomes, even the declarations of intent have caused some conservative officials to reject ESG as part of a broader pushback against left-leaning “woke” politics.

In an October letter to BlackRock’s CEO, Louisiana State Treasurer John Schroder said the state would be withdrawing some $800 million from its stake in the company, a move he said was “necessary to protect Louisiana from actions and policies that would actively seek to hamstring our fossil fuel sector.” Texas has banned its own cities from doing business with firms that it determines are “boycotting” fossil fuels. Leading the charge has been Florida Gov. Ron DeSantis, who is determined to make his state the place “where woke goes to die.” In an August statement announcing the removal of ESG considerations from the state’s pension investments, DeSantis said ESG reflected a corporate attempt to “impose an ideological agenda on the American people through the perversion of financial investment priorities.”

Approaches vary, but as many as 24 states have taken some type of action against ESG to date. Some officials are seeking to protect key industries, like oil and gas in Texas and Louisiana, while others say they’re acting to protect public money by keeping nonfinancial concerns out of their investment strategies. Overall, ESG “isn’t greatly understood, so it’s easy to mischaracterize and use as a weapon to gin up outrage,” says Chris Fidler, head of industry codes and standards at CFA Institute. Over the next year, Fidler says, it’s likely that more jurisdictions and fund analysts will develop disclosure protocols, to better describe how ESG factors into certain investments.

Still, the backlash may intensify in the short term. House Republicans have vowed to use their new majority to investigate ESG practices, including the Securities and Exchange Commission’s proposed disclosure rules for climate change-related risks. It’s possible that the ESG label, still relatively young and never a perfect description for a variety of practices, will start to unravel. But investors aren’t going to stop considering nonfinancial factors for their portfolios, particularly when it comes to climate risks.

— Jared Brey

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Crime was an inescapable issue during last year’s midterms. Combined, candidates and issue groups spent more than $150 million on attack ads regarding crime, mainly tarring Democrats for being too soft. In the past, when the public mood has turned punitive, policies to increase incarceration have followed close behind.

But the mixed results of the elections may produce conflicting results when it comes to policy. The pendulum is always swinging between states becoming harsher and times when they pull back. This year, the pendulum will swing both ways at once. “I expect unprecedented cross-currents this year, with blue states going harder at reform and red states rolling things back,” says Adam Gelb, president of the Council on Criminal Justice.

Consider bail. Last year, Illinois became the first state to eliminate cash bail entirely (although the state Supreme Court put that plan on hold, at least temporarily, just before it was set to take effect on Jan. 1). The new Democratic majorities across the lake in Michigan look ready to alter bail requirements, although they likely won’t eliminate them entirely. Conversely, New Jersey might roll back reforms passed a few years ago, as part of the spillover from media coverage of crime increases in New York.

Several states in the South are prepared to imitate a 2021 Texas law that made cash bail a prerequisite for release for many more of the accused. Other red states such as Missouri are looking at bills that would create harsher sentences for convicted offenders. Still, not everyone thinks the return of tough-on-crime rhetoric during the campaign year will translate into widespread policies that increase incarceration. “I don’t think red states will revert back to tough on crime, honestly,” says Jillian Snider, director of criminal justice policy at the R Street Institute, a conservative think tank. “They recognize the burden tough on crime has put on us, with costs of housing inmates at $50,000 or $60,000 a year.”

The criminal justice reform détente over the past decade or so between conservatives and liberals has come on the “back end,” dealing with re-entry issues, when people are coming out of prison, as opposed to the sentencing laws that put them there. There’s still considerable momentum for policies that help ex-offenders establish productive lives, notably “clean slate” laws that expunge people’s records to give them a leg up on finding housing or jobs. Even in red states, there are bills on tap to make expungement automatic. Clean slate and proposals to eliminate fines and fees are being pushed by advocacy campaigns with budgets in the tens if not hundreds of millions of dollars behind such efforts.

It may sound simple, but getting people into prison or out of prison requires manpower. That’s something in short supply. Policing, courts, corrections, parole — go down the list and every part of the system seems to be in crisis mode due to vacancies and turnover.

That’s something policymakers will be forced to pay attention to, says Marshall Clement, deputy director of the Council of State Governments’ Justice Center. While many states have seen increases in homicide and violent crime rates, clearance rates — cases resulting in arrests or otherwise being cleared — have gone down in all but a handful of states. That may sound like a technical problem, but Clement says that in terms of deterrence, “A dollar spent increasing time served is less effective than an increase in the odds of getting caught.”

Lawmakers should be thinking about things like funding for backed-up crime labs, Clement says. “You can’t really get tougher on crime,” he says, “by punishing fewer and fewer people longer.”

— Alan Greenblatt

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The Respect for Marriage Act was a bipartisan milestone. By establishing that same-sex and interracial couples are entitled to the rights and responsibilities of marriage by federal law, it eased anxieties that a second cultural bombshell might come from the Supreme Court.

The law doesn’t interfere with the rights of religious organizations to define marriage or require business owners to provide service to same-sex couples or families. It doesn’t prevent states from banning same-sex marriage, but Melissa Deckman, CEO of the Public Religion Research Institute (PRRI) doesn’t expect to see many states moving in that direction.

A 50-state survey conducted by PRRI in 2022 found almost seven in 10 Americans support same-sex marriage, as do majorities of religious groups. Almost 80 percent favor laws protecting LGBTQ people against discrimination in housing, jobs and public accommodations.

“When it comes to LGBTQ issues, momentum is going to be around issues surrounding transgender rights and school curriculum,” says Deckman. In 2022, hundreds of new bills sought to limit classroom discussion of gender and sexuality, restrict health care for transgender youth or ban them from school sports. Very few became law.

In June, the U.S. Department of Education (DOE) released proposed amendments to Title IX regulations that, among other things, would establish protections against “discrimination based on sexual orientation and gender identity.” If these are adopted, schools that don’t allow transgender students to use the bathrooms or pronouns that match their gender identity could lose federal funding.

The push to keep issues of gender and sexuality out of schools is framed as a matter of parental rights. “There’s a fear on the political right that even discussing transgenderism is akin to indoctrinating students,” says Deckman.

States and districts have banned books with LGBTQ characters and themes. The civil rights enforcement arm of the DOE announced that it is investigating the legality of bans instigated by a North Texas school district, a sign of pushback that will be welcomed by librarians and students who easily found the books elsewhere.

Trans girls and women have been banned from publicly funded sports in nearly 20 states. Courts in several states have blocked such bans, and a federal appeals court in Connecticut recently threw out a case challenging a trans-inclusive sports policy.

Controversy has centered around competitive advantage, says Pepperdine law professor Maureen Weston, director of the university’s Entertainment, Media and Sports Dispute Resolution Project. But the science to support this concern is still in flux.

It's hard enough for any young person to come out as transgender without the added penalty of being excluded from sports, Weston says. “The fairness of it has to be balanced against this as well.”

If policy debates around sex and gender are meant to improve the well-being of young people, there’s another factor to consider. A 2022 survey of 34,000 LGBTQ youth by the Trevor Project found that 45 percent had “seriously considered” suicide in the past year. Inflammatory rhetoric reaches them through social media, whether they search for it or not.

— Carl Smith

Alan Greenblatt is the editor of Governing. He can be found on Twitter at @AlanGreenblatt.
Carl Smith is a senior staff writer for <i>Governing</i> and covers a broad range of issues affecting states and localities. He can be reached at or on Twitter at @governingwriter.
Jared Brey is a senior staff writer for <i>Governing</i>. He can be found on Twitter at @jaredbrey.
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