Republicans launch group to combat ‘threat’ posed by ESG investing
House Republicans are creating a new working group to further their pushback against environmental, social and governance investing, known as ESG.
A press release from the House Financial Services Committee announcing the group said it will be aimed at combating what they described as a “threat to our capital markets.”
The group will be led by Rep. Bill Huizenga (R-Mich.).
It will seek to “develop a comprehensive approach” to the ESG issue and “hold Biden’s rogue regulators accountable,” Financial Services Committee Chairman Patrick McHenry (R-N.C.) said in the release.
The press release did not give specifics as to how it would do so, and a spokesperson did not immediately respond to questions from The Hill.
ESG investing is a broad term for attempts to invest ethically and can include actions by the government, investment firms and banks or individuals.
Huizenga, in the press release, specifically called out a proposal from the Securities and Exchange Commission that would require companies to disclose their contributions to climate change.
Both this proposed rule and ESG in general have gotten pushback from Republicans, who have raised concerns about its impacts on the fossil fuel industry, as burning fossil fuels is the main driver of climate change. Republicans have also raised concerns that ESG could push money managers toward choosing social issues over profits for their clients.
The GOP has been widely expected to take on the issue with their new House majority, with McHenry previously telling The Hill that his committee will “work together to conduct appropriate oversight of activist regulators and market participants who have an outsized impact.”
Proponents of ESG argue that it is possible to do good for the planet and well financially at the same time. A 2021 meta-analysis from New York University found ESG to be generally associated with better financial performance for stock holders.
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