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WASHINGTON – Today, U.S. Representative Melanie Stansbury (N.M.-01), debunked myths about Environmental and Social Governance (ESG) investment practices during a House Committee on Oversight and Accountability hearing.
America’s most successful investors and asset managers have embraced ESG principles for decades, as they frequently result in more resilient and profitable investments because they encourage asset managers to consider all material risks and opportunities.For example, a 2022 PricewaterhouseCoopers report found that 60% of asset managers surveyed experienced higher performance yields as a result of responsible investment practices.
“Why on earth is the GOP waging a war on ESG? Especially when it's so completely unpopular with American corporations, the market investors, American voters,” said Rep. Stansbury. “In fact, 19 states have actually moved under extreme governors and state officials to try to ban ESG investing. …We have to follow the money. And the reality is, is that this is a well-coordinated and political attack.”
Rep. Stansbury continued, “The GOP is claiming that this is about fiscal responsibility…That is not what this is about, it's a dark-money-funded culture war attack not only on the American economy, but on the American people.”
In November 2022, the U.S. Department of Labor moved to end Trump-era restrictions that prevented retirement plan fiduciaries and pension fund managers from considering responsible investment factors for the benefit of America’s workers, a move that the House Republican majority has attempted to challenge in Congress.
Republicans’ coordinated campaign against responsible investing is fueled by dark money groups, corporate special interests, election and climate science deniers, and right-wing radicals. Seventy percent of Republican voters oppose these efforts.
The full recording of the hearing can be found HERE. Rep. Stansbury’s full remarks as delivered are below.
Thank you, Mr. Chairman. As a social scientist who's worked on climate and sustainability issues for many years—in fact, all of my career—I actually welcome the discussion today on sustainable investing. As we know, it's crucial to the future of our planet and also our economy.
But obviously, that's not what this hearing is actually about. I've watched and listened today and seen as this hearing has devolved into yet another crusade in the political culture wars.
But, I am disappointed, Mr. Chairman, to see the use of this committee's precious time to air yet another dark money funded conspiracy laden attack on American freedom. I'm surprised to see that in this case it's an attack on the market itself.
It's amazing to me to see the kinds of attacks we've seen on American freedom by the majority attacks on our bodies banning books. And now, we're talking about banning the way that businesses are able to invest their own capital and public bodies.
But what's especially amazing about this is how radically out of touch it is with the American public. And in fact, what's particularly insane about these bans on ESG, is how out of touch they are with voters themselves, including Republican voters.
And Mr. Marshall, I know you've been at the forefront of this effort. But I want to ask you, are you aware that the majority of Americans and Republican voters are actually opposed to ESG restrictions?
Mr. Marshall: I can tell you that I've had multiple comments from individuals throughout my state, the 5 million, almost, Alabamians that I represent.
Rep. Stansbury: Thank you, Mr. Marshall. I'm going to direct your attention to this chart behind me. A recent poll that was released in Politico shows that the vast majority of Americans are actually opposed to restrictions on ESG. In fact, 63% of American voters overall, and over 70% of Republican voters. 70% of Republican voters are actually opposed to restrictions on ESG. But it's not just the public, it's American businesses as well. Corporations, investment firms. Mr. Marshall, are you aware that the vast majority of American businesses are also opposed to these restrictions?
Mr. Marshall: Would you like me to be able to answer the first question that you asked me?
Rep. Stansbury: Mr. Marshall, are you aware that the vast majority of American businesses are also opposed to these restrictions?
Mr. Marshall: I'm going to answer the first question that you cut me off on, which is that as I've gone around-
Rep. Stansbury: Thank you Mr. Marshall, and in fact, Mr. Marshall, media outlets such as Fortune, Forbes, The Washington Post, have recently published articles warning American investors about these attacks on ESG, and explaining why they are bad for business.
Now, let's talk about why they're opposed. Because profitability fundamentally depends on risk management. And Mr. Frerichs, you know this because you're an asset manager, and corporate America understands the real and significant risks posed by global climate change, and the other social and environmental factors that are presented as part of part of ESG factors and data as they're presented in investing.
So my question is, why on earth is the GOP waging a war on ESG? Especially when it's so completely unpopular with American corporations, the market investors, American voters.
In fact, 19 states have actually moved under extreme governors and state officials to try to ban ESG investing. We're talking about legislation, executive orders, and the very lawsuit that we're here discussing today.
So my question is, why is this happening? And I think Mr. Frerichs, as you've indicated, I think in your testimony, we have to follow the money. And the reality is, is that this is a well-coordinated and political attack. Is that not true? Mr. Frerichs?
Mr. Frerichs: It seems that the fossil fuel industry is leading a charge here. We had talks about how banks are muscling companies. We have seen that- we have seen banks, most banks, being muscled.
Legislation in Texas is muscling banks to invest in the fossil fuel industry. Banks like to be diversified, and if they decided that they wanted to invest in renewable resources, like biofuels from Iowa, or wind turbine blades from Ohio, or solar panels being installed in Arizona, they would be punished for that. That's the real shame here.
Rep. Stansbury: Right. So ESG has become another boogeyman in the culture wars. This is not about fiscal responsibility. You know, it's evident we're sitting here in the very week that we're debating a potential default on the American debt ceiling.
And yet, the GOP is claiming that this is about fiscal responsibility. A fiduciary responsibility to shareholders and the public. That is not what this is about, it's a well-funded—dark-money-funded culture war attack not only on the American economy but on the American people. And with that I yield back.