The group will be led by Rep. Bill Huizenga, R-Mich., and include eight other Republican committee members.
Among its priorities, the group will examine ways to "rein in the SEC's regulatory overreach;" reinforce the materiality "standard as a pillar of the nation's disclosure regime;" and hold to account market participants who "misuse the proxy process or their outsized influence to impose ideological preferences in ways that circumvent democratic lawmaking," according to a news release.
"This group will develop a comprehensive approach to ESG that protects the financial interests of everyday investors and ensures our capital markets remain the envy of the world," Mr. McHenry said in the news release. "Financial Services Committee Republicans as a whole will continue our work to expand capital formation, hold Biden's rogue regulators accountable, and support American job creators."
Republicans on Capitol Hill have taken issue with many Securities and Exchange Commission rule-making initiatives launched under Chairman Gary Gensler, most notably an SEC proposal that would require public companies to disclose a host of climate-related information in their registration statements and periodic reports.
Mr. Huizenga was a co-sponsor of a bill introduced in December that would limit the SEC's ability to establish additional disclosure requirements on public companies.
Specifically, Republicans have particularly taken issue with the proposal's requirement for public companies to disclose the greenhouse gas emissions they generate or purchase, and the indirect emissions generated from a company's supply chain, if material, though smaller companies would be exempt from the latter requirement, referred to as Scope 3.
Also, the SEC in July voted to rescind two Trump-era amendments to its rules concerning proxy-voting advice. The amendments, originally adopted in 2020, required companies that are the subject of voting advice to have access to that advice prior to or at the same time it's disseminated to clients, and require proxy-advisory firms to give clients access to any response the company provides on voting advice before clients voted.
Rep. Bryan Steil, R-Wis., one of the working group's members, introduced a bill in December to restore the Trump-era amendments.
The bills aimed at reversing or blocking the SEC's ESG-related agenda items would face an uphill climb in a Democrat-led Senate and a certain veto from President Joe Biden.
The announcement Friday comes after every Senate Republican, led by Sen. Mike Braun of Indiana, along with Sen. Joe Manchin, D-W.V., and Rep. Andy Barr, R-Ky., on Wednesday announced that they will reintroduce a joint resolution that would nullify the Department of Labor's new rule permitting retirement plan fiduciaries to consider climate change and other environmental, social and governance factors when selecting investments and exercising shareholder rights.