House Republicans stepped up their investigation into the sustainability activities of investment firms on Monday, demanding that two such firms hand over information about their efforts to decarbonize their assets.
GOP lawmakers have for months taken aim at companies’ efforts to consider environmental, social and corporate governance standards when doing business. Known by the acronym ESG, the philosophy signals to investors that a publicly traded company operates in a socially or environmentally conscious manner.
But Republicans have criticized ESG and the Biden administration’s efforts to support its use, arguing among other things that such standards force companies to prioritize sustainability over good business practices.
Most recently, the House Judiciary Committee, led by Ohio Republican Jim Jordan, joined the Glasgow Financial Alliance for Net Zero, a coalition of hundreds of international financial institutions advocating for the decarbonization of the global financial system.
Lawmakers investigating the coalition and its subgroups have accused members of entering into “collusive” agreements that they say violate antitrust laws by stifling competition among investment firms.
The Judiciary Committee has demanded that some of the industry’s biggest companies, such as BlackRock and Vanguard Group, provide Congress with more information about their ESG efforts. Writing to those firms over the summer, the lawmakers argued that agreements to reduce the investment industry’s carbon footprint would have “potentially harmful effects on the freedom and economic well-being of Americans.”
Unsatisfied with the information submitted by the companies in his crosshairs, panel chairman Jordan on Monday issued subpoenas to Vanguard and Arjuna Capital, an investment firm focused on sustainability.
In a letter accompanying the legally binding subpoenas, the Ohio Republican told the two companies that his committee would use the requested information for future legislative action, such as “whether existing civil and criminal penalties and current antitrust enforcement efforts are sufficient to deter anti-competitive collusion in the investment industry.”
Jordan also slandered Massachusetts-based Arjuna Capital, suggesting in his letter that the firm had “artificially limited” its responses to previous committee requests for information.
A spokesperson for Arjuna Capital said the company has “responded and intends to[s] to fully comply” with the Judiciary Committee’s subpoena. The spokesman declined to comment on Jordan’s accusation.
Meanwhile, a Vanguard spokesman said the company “is committed to working constructively with lawmakers and has cooperated with the committee’s requests, including the production of tens of thousands of pages of relevant documents to date.”
“As an independent asset manager owned by the investors in our funds, we remain focused on helping everyday investors achieve their long-term financial goals,” the spokesperson said.
The push by House Republicans against ESG standards comes just months after the Biden administration vetoed a joint congressional resolution overturning Labor Department rules on the subject.
The agency’s rule, passed last year, allows pension fund managers to consider ESG standards when choosing where to make investments. The Labor Department said the rulemaking simply clarifies existing guidance — arguing that previous rules could be seen as distancing pension fund managers from ESG investments.
The White House, which vetoed the joint resolution last March, offered full support for the ESG standards, arguing that Congress would “force pension managers to ignore these relevant risk factors, flouting free-market principles and jeopardizing the savings of working families and retirees.” .
Then-House Speaker Kevin McCarthy accused the Biden administration of siding with “woke Wall Street” over American workers.
West Virginia Sen. Joe Manchin, a Democratic White House critic who has since said he will not seek re-election, said at the time that the administration was prioritizing a “radical political agenda over the economic, energy and national security needs of our nation.” country. “
