Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Politics

Dazed and Confused at Congress’ ESG Hearing

That was seriously weird.

House Republicans.
Heatmap Illustration/Getty Images

Of all the nonsense spouted during the House Oversight Committee’s “ Examination of Environmental, Social, and Governance Practices with Attorneys General: Part One” on Wednesday, perhaps the most patently false comment came from Arizona Republican Rep. Andy Biggs. “Always interesting to hear people say things,” the congressman mused.

It is not, in fact, always interesting to hear people say things, something that the GOP-controlled House’s ESG hearing illustrated time and time again. In the three-and-a-half hours that Utah’s Attorney General Sean Reyes, Alabama’s Attorney General Steve Marshall, and minority witness Michael Frerichs, the Illinois state treasurer, were grilled by House members, it became obvious that “there were two different hearings occurring,” as Chairman James Comer, Republican of Kentucky, noticed in his closing remarks.

Comer’s comment was intended as a dig at Democrats, who certainly shopped their own agendas during the event, but his party was guilty of the same offense. ESG stands for “environmental, social, and governance” and refers to a mainstream financial investing philosophy that considers factors beyond pure earnings numbers, such as a company’s diverse board, which has been shown to improve performance, or the momentum behind the transition to renewable energy, which might make investing in an oil company a bad long-term bet.

For one half of the committee room, ESG investments are also “an attack on capitalism” and a grave violation of fiduciary duty in pursuit of a “left-wing agenda”; for the other half, ESG investments are prudent and beneficial, informed by a greater reach of “data,” and in observation of the basic principles of the free market. Ne’er the twain arguments did meet, or even especially engage with one another.

The hearing began with Ranking Member Jamie Raskin, Democrat of Maryland, tracing the Indo-European roots of the word “woke” and went downhill from there. Republicans played all their hits: They got emotional talking about their big, beautiful pickup trucks; cited China’s ambitions to “rule the planet”; and if you had “socialist utopia,” “radical left,” “pronouns,” “the Bible says…,” and “get woke, go broke” on your bingo card, you’d have won a cash prize.

There were “anti-Semetic overtones up to 11,” as The New Republic’s Kate Aronoff pointed out, and Rep. Glenn Grothman, Republican of Wisconsin, complained that “there are certain disfavored groups in our society” who might be disadvantaged by ESG principles because “people don’t like men, people of European backgrounds, that sort of thing.” The University of Alabama vs. University of Tennessee football rivalry was, for some reason, relitigated. There was a requisite dig at tofu. Godwin’s law — that all lengthy debates bend toward an eventual Nazi reference — was proven.

As incredibly dumb as the hearing was, though, it was also incredibly important. Republican state treasurers and right-wing think tanks and donors have moved to punish companies, banks, and investors that have seen the writing on the wall — that “natural disasters and warming temperatures can lead to declines in asset values that could cascade through the financial system,” as Treasury Secretary Janet Yellen warned earlier this year, and that “the industries of the future,” like renewables, “are winning,” as Rep. Seth Magaziner, Democrat of Rhode Island, who is not on the Oversight Committee but spoke in a guest appearance at the hearing on Wednesday, said.

Already, though, some 15 states have introduced legislation to effectively penalize businesses that have aimed for more climate-friendly policies, with West Virginia’s state treasurer pulling $20 million out of a fund managed by Blackrock over the firm’s push for companies to reduce emissions and Texas passing a law barring the “energy discrimination” of firms that choose not to do business with fossil fuel companies. It’s a trend that has many in the climate space deeply concerned.

“Using ESG principles to help inform investing is not a breach of fiduciary duty. On the contrary, not taking all factors related to risk and opportunity into account can be seen as a breach of fiduciary duty,” Cathy Cowan Becker, the responsible finance campaign director for Green America, said in a statement. “Individual, institutional, and public asset investors should be free to consider all information when making critical investment decisions. This is how the free market works.”

The choice of Republican witnesses was telling, too. Both Marshall and Reyes were among 13 attorneys general who filed a protest with the Federal Energy Regulatory Commission last winter over the investment firm Vanguard’s attempt to buy electric-power utility company shares in what the AGs alleged was “contrary to the public interest” and an instance of “environmental activism.” The pair of AGs also signed on to sue the Biden administration over the Department of Labor’s new rule allowing for fiduciaries to make ESG considerations; additionally, Marshall and Reyes added their names to a letter sent to banks and asset management companies threatening legal action if ESG-informed investment strategies were pursued. Reyes, Utah’s attorney general, has also sued the National Association of Attorneys General “over their investment of public money into ESG funds,” The Center Square reports.

And as Rep. Magaziner, the Democrat from Rhode Island, pointed out, “The two Republican witnesses who are here, who may be very credentialed in other ways, between the two of them have zero degrees in investments or economics or finance, are not CPAs, are not chartered financial analysts.” Rather, “Our Republican witnesses have experience trying to overturn elections that were freely and fairly won.” The Democrats’ minority witness, Illinois Treasurer Michael Frerichs, meanwhile, looked wearier and wearier as the day wore on and he remained the lone voice defending ESG investing as inherently being in the best interest of clients.

The outwardly strange battle lines of the ESG fight have resulted in some real moments of cognitive dissonance, and that held true at Wednesday’s hearing. “I just watched @GOPoversight’s hearing on #ESG and you might be surprised to hear how much the @GOP favors securities disclosures these days ... what is even going on here,” Brad Kutner of the National Law Journal tweeted after Republican congressmen bemoaned the lack of transparency around ESG investments. And Rep. Lauren Boebert, the MAGA provocateur from Colorado, used her time to slam Blackrock as a “primarily left-wing activist fund that uses its status as the fiduciary for several investment funds to coerce companies into introducing ESG politics into their retirement account savings.” Writer and analyst Kelly Mitchell, in a must-read Twitter thread chronicling the hearing, pointed out that irony:

Democrats weren’t exempt from cringe-worthy moments, either. “If you don’t have a woke capitalism you’re going to have a broke capitalism,” Raskin said, and then unfortunately repeated. And in one of the hearing’s oddest moments, freshman Rep. Jared Moskowitz, Democrat of Florida, used his time to veer off topic and advocate for gun reform, leading to a brief verbal spat with the chairman.

But Moskowitz’s tangent also produced perhaps the most relatable statement of the whole hearing. “I don’t know what we’re doing here, Mr. Chairman,” Moskowitz said, his frustration finally boiling over. “This is part one; there’s going to be a part two? I mean, part one was just so fascinating. I can’t wait for part two.”

Blue

Jeva Lange

Jeva is a founding staff writer at Heatmap. Her writing has also appeared in The Week, where she formerly served as executive editor and culture critic, as well as in The New York Daily News, Vice, and Gothamist, among others. Jeva lives in New York City. Read More

Read More
Politics

AM Briefing: Earth Day Edition

On expanding solar access, the American Climate Corps, and union news

Biden’s Big Earth Day Agenda
Heatmap Illustration/Getty Images

Current conditions: Torrential rains forced Mauritius to shut down its stock exchange • “Once in a century” flooding hit southern China • In the Northern Hemisphere, the Lyrid meteor shower peaks tonight.

THE TOP FIVE

1. Biden kicks off Earth Day with $7 billion for expanding solar access

Today is Earth Day, but President Biden and his cabinet are celebrating all week long. Senior members of the administration have scheduled a national tour of events and announcements related to the president’s climate and environmental record. It starts with Biden’s visit to Prince William Forest Park in Triangle, Virginia, today, where he will announce $7 billion is being awarded to 60 state and local governments, tribes, and national and regional nonprofits through the Environmental Protection Agency’s Solar for All initiative, which aims to support solar in low- to moderate-income communities. The average grant size will be more than $80 million, and the funding will be used to design new programs and bolster existing ones that subsidize the cost of rooftop solar installations, community solar projects, and battery storage.

Keep reading...Show less
Yellow
Sparks

Biden’s $7 Billion Solar Bonanza

The Solar For All program is the final piece of the $27 billion Greenhouse Gas Reduction Fund.

Solar panel installation.
Heatmap Illustration/Getty Images

The great promise of solar panels — in addition to their being carbon-free — is the democratization of energy. Anyone can produce their own power, typically for less than the going utility rate. The problem is that those who stand to benefit the most from this opportunity haven’t been able to access it.

That pattern could change, however, with Solar for All, a $7 billion program under the Environmental Protection Agency to support solar in low- to moderate-income communities. On Monday, the Biden administration announced it was awarding the funds to 60 state and local governments, tribes, and national and regional nonprofits, at an average grant size of more than $80 million.

Keep reading...Show less
Green
Climate

A Big Week for Batteries

Texas and California offered intriguing, opposing examples of what batteries can do for the grid.

A battery.
Heatmap Illustration/Getty Images

While cold winters in the south and hot summers across the country are the most dramatic times for electricity usage — with air conditioners blasting as weary workers return home or inefficient electric heaters strain to keep toes warm from Chattanooga to El Paso before the sun is up — it may be early spring that gives us the most insight into the lower-emitting grid of the future.

In California, America’s longtime leader in clean energy deployment, the combination of mild temperatures and longer days means that solar power can do most of the heavy lifting. And in Texas — whose uniquely isolated, market-based and permissive grid is fast becoming the source of much of the country’s clean power growth — regulators allow the state’s vast fleet of natural gas power (and some coal) power plants to shut down for maintenance during the mild weather, giving renewables time to shine.

Keep reading...Show less