Two Democratic lawmakers announced the launch of the Congressional Sustainable Investment Caucus on Wednesday, which will aim to inform policy related to environmental, social and governance investing.
"The size and importance of (the ESG) space demands Congressional understanding to understand those markets, to ensure access to those markets and robust investor protections, and to make sure that we have transparent and consistent disclosures and definitions," Rep. Sean Casten, D-Ill., said at a press conference in his office.
The caucus, also known as the CSIC, will be co-chaired by Mr. Casten and Rep. Juan Vargas, D-Calif. Other founding members include Reps. Bill Foster, D-Ill., Raúl Grijalva, D-Ariz., and Emanuel Cleaver, D-Mo., a new release states.
According to the US SIF's Report on US Sustainable Investing Trends, there were $8.4 trillion in sustainable investment assets under management at the beginning of 2022.
"The market has spoken," Mr. Vargas said at the press conference. "To investors across the country, ESG issues are material and must be accounted for when making financially sound and responsible investment decisions."
According to Mr. Vargas, the caucus will inform lawmakers on the benefits of sustainable investment and advise policymaking; host events and discussions with investors, fund managers, companies and regulators; and support federal agencies, including the SEC, in advancing rules and regulations pertaining to sustainable investment.
The announcement comes amid attacks on ESG investing from several Republican state and federal officials, who have often called the movement "woke."
The SEC unveiled a highly contested rule proposal in March that would require public companies to disclose an array of climate-related information in their periodic reports and registration statements. This led to several GOP-led bills, including one in December, that would block the rule proposal, though the bills would need to be reintroduced in the new Congress. The SEC is working to finalize the climate disclosure rule by the end of April, according to their updated regulatory agenda.
Mr. Casten said the creation of the caucus was partly "for defensive reasons," adding that "when capitalism is working well but you're not winning, you tend to call it woke capitalism."
Lisa Woll, CEO of US SIF, said at the press conference that "sustainable investment is in the mainstream of finance" because investors that don't consider ESG factors are "not adequately assessing risk and missing an opportunity to both make better investments and to contribute to a more sustainable economy."
Ceres, a non-profit working to advance sustainable investing, also voiced their support for the CSIC.
"Today, we welcome the formation of the House Sustainable Investment Caucus to help drive better understanding in Congress of the forward-looking and responsible investment practices our economy needs to flourish," said Mindy Lubber, Ceres president and CEO, in a statement.