“Anti-ESG Month” Fell Flat, Was A Positive Opportunity to Educate About Sustainable Investing
What we thought could be a challenging “anti-ESG month” in the House Financial Services Committee turned into political theater consisting largely of re-treads of old arguments and low levels of energy from the majority. If anything, the hearings were a platform for sustainable investment and pro-ESG advocates to make a clear case as to why these criteria matter.
Instead of the full-throated attack on ESG and sustainable investing as laid out in Representative Huizenga's (R-MI) ESG Working Group memo, the committee majority focused instead on undermining shareholder rights. They introduced and passed a package of bills that attack the shareholder proposal process, target proxy advisors for burdensome regulations, and jeopardize the independence of proxy advisor research. We expect to see these bills pass the House on partisan grounds sometime in the Fall, and they will not move at all in the Senate.
One of the reasons that the majority's focus on ESG disclosure fell flat was because sustainable investing supporters on the committee came prepared to protect investors with facts about the field, powerful examples, and a clear understanding that this attack is motivated by a will to protect special interests. Key to this success was the influence of the Congressional Sustainable Investment Caucus. When we worked with Reps. Juan Vargas and Sean Casten to create the Caucus, our vision was to create a place where Members of Congress could go to get fact-based information about sustainable investing informed by experts in the field. Throughout the month of July and in the leadup to the hearings, the Caucus worked with Ranking Member Waters and her staff to raise the education level of Representatives on the Committee by hosting events and soliciting input from experts.
US SIF was asked to participate in multiple briefings and to speak at a press conference with Members of Congress about sustainable investing. We also worked to make sure that the facts about our field were submitted to the official record for the hearings. We convened a group of investor organizations in support of sustainable investing to submit a joint letter for the record. We also submitted a letter for the record following the subcommittee hearing on proxy advisors explaining how our members use their services and countering misinformation spread during the hearing.
In addition to influencing the hearings, our priority was to make sure that US SIF members were informed about what was happening throughout the month through our social media posts and with an exclusive member webinar that featured resources like our policy briefing on the legislation and our ESG Truths website. Finally, we worked to shape the narrative around the hearings by hosting a webinar for journalists where we explained the facts about sustainable investing; placing an opinion editorial by US SIF's CEO, Maria Lettini, in MarketWatch; and releasing statements to the press that got picked up in Pensions and Investments, Responsible Investor, Politico, and Investment News.
While the attack on ESG disclosure and sustainable investing continues to be a focus for many politicians, last month's series of hearings were not successful in moving the needle within the industry. Instead, they were a critical opportunity to educate Members of Congress about the importance of ESG data and how investors use it to make informed investment decisions. US SIF will continue to monitor events on Capitol Hill related to these issues and members can stay informed by following us on LinkedIn and X, formerly Twitter.