House Republicans in the Environmental, Social, and Governance Working Group released a report laying out what they see as the “failure of ESG,” further cementing their views against the framework.
The House Financial Services Committee formed the ESG Working Group in February 2023 to “coordinate a response to the troubling increase in efforts to force progressive policies on the private sector,” according to the group’s Aug. 1 staff report.
“Politically motivated ESG mandates put Americans’ financial security at risk and have no place in corporate boardrooms,” said Rep. Patrick McHenry, R-N.C., chair of the House Financial Services Committee, in an Aug. 1 news release. “The committee’s ESG Working Group report supports this fact as well as provides recommendations to address the failures of progressive environmental and social policy goals.”
Republicans in Congress have long been critical of ESG investing and repeatedly go after climate-related initiatives from the Biden administration via hearings, legislation and Congressional Review Act resolutions, which seek to overturn federal agency rules.
“The continued prioritization of ESG initiatives by the Biden administration is a deliberate strategy to circumvent the lack of congressional support for progressive environment
and social policy measures,” the report stated.
The report specifically homes in on the Securities and Exchange Commission, as it says the agency under Chair Gary Gensler “has and continues to exceed its statutory authority and is testing the bounds of extreme agency overreach.”
Rep. Bill Huizenga, R-Mich., who chairs the ESG Working Group, said in the news release that the report also “delivers tangible solutions to increase transparency and accountability surrounding the shareholder and proxy process.”
“The proxy voting system needs reform to strengthen shareholder engagement, promote transparency, and eliminate inefficiencies,” the report stated. “The system must be modernized to enhance corporate governance and ensure that it operates in the best interests of shareholders.”
The last section of the report lays out “several pathways to combat ESG initiatives,” including through the courts, legislation and congressional oversight.
