House committee advances legislation opposing ESG (2023)
| Environmental, social, and corporate governance |
|---|
|
| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • Economy and Society: Ballotpedia's weekly ESG newsletter |
The House Financial Services Committee announced on July 27 that, after investigating and considering ESG policy for most of the month, the committee advanced seven pieces of legislation opposing ESG.
| “ |
Today, the House Financial Services Committee passed seven pieces of legislation out of Committee that establish a regulatory framework for payment stablecoins, protect self-custody for digital assets, overturn the CFPB’s disastrous small business lending data collection rule, and combat the influence of ESG initiatives in our financial markets.[1] |
” |
Legislation passed out of the committee included the following:
| “ |
H.R. 4767, the “Protecting Americans’ Retirement Savings from Politics Act,” offered by Rep. Bryan Steil (WI-01), improves the shareholder proposal and proxy voting process to prioritize corporate growth over partisan political issues. It raises resubmission thresholds for shareholder proposals, invalidates certain SEC regulations and guidance, limits the SEC’s ability to define a “major policy issue,” and allows companies to exclude environmental, social, and political proposals. Additionally, the bill provides transparency and accountability to the proxy advisory industry, prohibits robovoting, and requires proxy advisory firm clients to issue annual public reports on their proxy voting. Finally, the bill requires large asset managers to conduct economic analysis when voting against board recommendations and requires investors to consent to the use of non-pecuniary factors in decision-making.[1] |
” |
And:
| “ |
H.R. 4655, the “Businesses Over Activists Act,” offered by Rep. Ralph Norman (SC-05), clarifies that the SEC does not have the power to regulate shareholder proposals through Rule 14a-8 and prevents the SEC from forcing companies to include or discuss shareholder proposals. Its goal is to limit the SEC’s control in this area and emphasize the role of state regulations in governing shareholder proposals.[1] |
” |
Politico published its own assessment of the committee’s ESG activity in July, saying that the focus on opposing ESG is expected to continue in the coming months:
| “ |
Over the course of six hearings this month, lawmakers on the Financial Services Committee mostly stayed away from bashing big business, as presidential candidates Vivek Ramaswamy and Florida Gov. Ron DeSantis have made hay doing. Rather, they targeted federal agencies, as in a bill by Rep. Bill Huizenga (R-Mich.) that would limit the type of disclosures the Securities and Exchange Commission can compel and one by Rep. Ralph Norman (R-S.C.) to limit the SEC’s ability to regulate shareholder proposals. … What was the point of the exercise? To whittle away at companies’ willingness to come out for progressive causes, says one ESG expert. “Will any laws change? I think the answer to that is pretty clearly no,” said Josh Lichtenstein, a Ropes & Gray attorney who specializes in ESG issues. “But...together with what’s happening in the states, it starts to create a sense that should companies be considering whether to engage in these matters or not, there could be potential backlash or be hauled in front of committees like this.” Sixteen states have passed anti-ESG bills this year alone, out of some 165 bills introduced. While GOP interest in the topic hasn’t waned, pushback from local business groups and state pension fund officials led some states to water down or kill some of their more heavy-handed efforts. “I increasingly think about what’s going on in the House and the states as one movement,” Lichtenstein said. “When you look at it from that perspective, what’s happening in the House can help to set priorities for the states. I think there is a feedback loop even if the House doesn’t really have the ability to pass legislation.” The beatings are likely to continue until morale improves. House Financial Services Chair Patrick McHenry (R-N.C.) told Jasper on Wednesday that this month’s hearings were “an opening act.”[1] |
” |
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
| |||||||||||||||||||||||
