The group is led by Rep. Bill Huizenga (R-Mich.), the Oversight and Investigations Subcommittee chairman, and includes eight other House GOP lawmakers. It was established by House Financial Services Committee Chair Patrick McHenry (R-N.C.) in February.
Working Group members say that President Joe Biden and his administration have strategically circumvented the paucity of congressional support for ESG policy issues and are “exploiting financial regulatory agencies to impose their policy and other ESG-related priorities on the private sector,” according to the report.
One of the tactics outlined by the report is to reform the proxy voting system in order to shield the financial interests of retail investors by advocating transparency, accountability, and accuracy. Moreover, Republican lawmakers want to bolster accountability in shareholder voting by coalescing voting decisions with shareholders’ economic interests.
But Republican officials also propose targeting regulators by strengthening conduct, oversight, and transparency through probes into federal regulatory initiatives and statutory limits from regulatory agencies. The report further recommends defending U.S. firms “from burdensome EU regulations” and “safeguarding American interests in global markets.”
“As Chairman of the ESG Working Group, I will work to push policies that benefit all Americans, not just those seeking to push their far-left agenda,” Huizenga said in a statement.
“Today’s preliminary report is clear about one thing, the Biden Administration is making it harder for Americans to retire. Across the nation, boardrooms are being held hostage by those who push policies that will lower returns for Americans trying to build a brighter and more financially secure future.
New Legislation
The Working Group released the interim report just days after Rep. Andy Barr (R-Ky.) introduced legislation on June 21 that focuses on financial advisers’ and retirement funds’ consideration of ESG issues and ensures that they concentrate on maximizing profits. This measure would limit investments in ESG. Investors must offer written consent if they wish to have their money parked in ESGs.In March, Biden vetoed a bill that would roll back a White House rule permitting fiduciaries to integrate ESG factors into their investment decisions. It garnered the support of three Democrats: Sen. Joe Manchin (D-W.Va.), Sen. Jon Tester (D-Mont.), and Rep. Jared Golden (D-Maine).
Barr contends that these efforts try “to depoliticize investing in America.”
The GOP War on ESG
Last summer, several Republican state leaders and officials fired the opening salvo in the war on ESG.Florida Gov. Ron DeSantis and the State Board of Administration trustees approved a resolution in August to end ESG considerations from state pension funds, arguing that the highest return on investment for taxpayers and retirees should be the main priority.
Earlier this year, 21 Republican attorneys general penned a letter to 53 of the largest U.S. fund firms, including BlackRock and JPMorgan Chase, raising fresh concerns surrounding their consideration of ESG factors.
ESG has emerged as a top subject for several candidates in the 2024 Republican primary race.
Presidential candidate and entrepreneur Vivek Ramaswamy has made opposition to “woke investing” integral to the core of his platform.
DeSantis noted in his presidential announcement that the ESG movement could never be accomplished through the ballot box.
“We will not be a free society if major financial institutions can do through the economy what people could not achieve through the ballot box.”