House Republicans and Democrats are set for another showdown over woke policies this week when they debate the impacts of ESG investing in financial regulation.
The House Financial Services Committee will hold separate hearings Wednesday and Friday to examine how environmental, social and corporate governance investing — or ESG — affects the finance industry and whether it contributes to increased insurance or housing costs.
“This shift in focus towards advancing environmental, social and political policies detracts from the primary purpose of public markets — to enable companies to raise capital and foster economic growth,” the panel’s GOP majority said in an advisory.
The last time House lawmakers debated ESG, which takes into consideration factors like climate change and social justice politics, was last month when an Oversight Committee hearing devolved into a combative debate over race and using the term “woke” to describe the investment strategy.
The hearings mark the first in a series from the Financial Services panel on the subject and the latest efforts by House Republicans to combat ESG, part of a broader anti-ESG war being waged by GOP state officials across the country.
The session on Wednesday will center on ESG’s impacts to the finance world, and discussion about the administration’s proposed rules that public corporations and government contractors submit climate disclosure reports to the Securities and Exchange Commission detailing their environmental impact. ESG critics say such reports would be expensive and complicated to compose.
If enacted, such requirements would divert “corporate resources away from growth and competitiveness,” the committee’s Republicans say.
“These additional reporting obligations place an unnecessary burden on companies, distracting them from their core objectives and hindering their ability to grow and compete in a global economy,” the committee’s hearing advisory said.
Democrats on the panel and members of the pro-ESG Sustainable Investment Caucus say they will respond by underscoring “the importance of preserving the free-market principles of consumer choice and investor freedom.”
The witness list for Wednesday includes three think-tank representatives and an attorney who specializes in corporate governance and corporate law.
The hearing on Friday will focus on ESG’s potential impact on rising insurance and housing costs. Witnesses have not yet been disclosed.
While conservative critics call ESG “woke capitalism” threatening U.S. businesses and everyday Americans’ retirements, proponents — including major financial institutions like BlackRock, Vanguard, JPMorgan and Wells Fargo — counter that the strategy takes into consideration investors’ moral values and unrealized long-term financial risks posed by climate change.
Last month’s ESG hearing before House Oversight featured Rep. Cori Bush, Missouri Democrat and member of the chamber’s far-left group called the “Squad,” who teed off on Republicans for repeatedly using the term woke. She accused her GOP colleagues of being racist and referred to the word’s origin, which stems from the Black Lives Matter movement after the 2014 killing of Michael Brown by police in Ferguson, Missouri.
“When you say, ‘I’m anti-woke,’ when you talk about ‘wokeness,’ you’re saying ‘I’m anti-Black,’ and ‘I don’t want Black people to speak up for themselves,’ and ‘I don’t want equality and justice for Black folks,’” Ms. Bush said. “This is not wokeness, what we talked about in here. Unless you are saying ‘I’m racist, a White supremacist and bigoted,’ stop talking about wokeness. You can’t tell me that I’m wrong because I’m from the very movement where this came about. Don’t let a fascist tell you what being woke means.”
She eventually exited the hearing before its conclusion after Republicans shot back at what they said were “incendiary” and “gaslighting” remarks.
“If you want to invest in mermaid freedom, knock yourself out,” said Rep. Pat Fallon, Texas Republican. “If you want to invest in carbon-free cookie monsters, knock yourself out. If you want to invest in a unicorn ranch, knock yourself out. It’s about not disclosing to the investor the criteria they’re using.”
He asserted: “It’s not White people hating on Black folks. It’s not that at all.”
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.