By Mark S. Nelson, J.D.
Americans for Financial Reform (AFR) and 32 other organizations sent a pair of letters (Letter 1 and Letter 2) to the House Ways and Means Committee leadership as well as to Speaker Mike Johnson and Minority Leader Hakeem Jeffries urging Congress not to move forward on a slate of Republican-led bills that AFR says could protect public companies from outside scrutiny, curb shareholder proposals, and potentially hinder bank regulators from responding to future economic crises. AFR also called on Congress not to pursue legislation that would emulate Trump-era DOL policies on ESG investing (The Biden Administration has already taken steps to roll back those policies).
The several bills singled out by AFR were part of the Republican majority’s July 2023 “ESG Month” in which the House Financial Services Committee marked up numerous bills aimed at combatting “woke” corporate policies. Republicans claim that legislation is needed to prevent workers’ retirement savings from being diverted into funds that may follow socially themed investment objectives to the detriment of investment returns.
AFR sought to make the case that polling showed a continued trend in favor of at last some ESG investment goals by citing data from two studies. The first study was conducted by ROKK Solutions and Penn State University’s Center for the Business of Sustainability. “For example, 63 percent of voters do not believe the government should set limits on corporate ESG investments,” AFR noted about the study’s conclusions.
The other study was a poll that appeared in an article in Fortune. A footnote in each of AFR’s letters indicated that the Fortune poll posed questions about anti-ESG efforts to 1,261 voters (a link to the Fortune article was not working and further information about the poll was, thus, unavailable).
AFR observed that the Fortune article noted a trend showing significant support for corporate social responsibility across political lines. AFR specifically cited a part of the article noting that: “And when it comes to how companies should operate in our society, ‘most voters (76 percent) feel companies play a vital role in society and should be held accountable to make a positive impact on the communities in which they operate.’ This includes both the majority of Republicans (69 percent) and the majority of Democrats (82 percent), reflecting strong bipartisan support.”