Stockholm (NordSIP) – Political pressure appears to continue to loom over ESG investors. While European politicians and asset managers appear to remain committed to sustainable investment, their USA counterparts continue to display all the signs of moving in the opposite direction. Despite the funding promised by the Biden Administration’s Inflation Reduction Act (IRA), (which seems to have been hit by delays lately) Republicans continue to treat ESG as a political battleground, threatening sustainable investors.
In the latest such move, Republican House Judiciary Committee Chairman Jim Jordan (R-OH) and Subcommittee on the Administrative State, Regulatory Reform, and Antitrust Chairman Thomas Massie (R-KY) sent an aggressive letter to 130 members of Climate Action 100+. The letter was particularly antagonistic, describing Climate Action 100+ as a “the woke ESG cartel”. The letters were sent after the House of Representatives Committee released an interim staff report in June purporting to present evidence of “climate cartel” consisting of “left-wing activists and major financial institutions that collude to impose radical environmental, social, and governance goals on American companies.”
Since the letter was sent, seven US members decided to leave the initiative: Franklin Templeton, SLC Fixed Income, Crescent Capital, Goldman Sachs Asset Management, Mellon Investments, TCW Group and Segal Marco Advisors.
This is not the first time that the initiative comes under fire by Republicans in the USA, which is presumed to be behind the exits of JP Morgan Asset Management, PIMCO, and State Street Global Advisors decided in the first quarter of 2024.
Republicans also seem to be leveraging the June 2022 decision by the US Supreme Court on West Virginia v. Enviromental Protection Agency (EPA) in their fight against ESG regulations implemented during the Biden Administration by the SEC. “Last year, the Supreme Court ruled in West Virginia vs EPA that government bureaucracies cannot arbitrarily expand their own regulatory reach,” said Congressman Bill Huizenga the leader of the new working group. “The SEC’s climate disclosure rule is a prime example of this overreach- that would have a wide-ranging impact on hard working Americans across all walks of life. I look forward to leading our committee’s ESG working group, which will focus on promoting strong, vibrant capital markets, while defending the interests of all retail investors.”
