Public Policy

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The Overturning of A Long Standing Legal Doctrine and Implications for Investors and Effective Policymaking

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A suite of recent Supreme Court decisions will create regulatory uncertainty with significant implications for the private sector and stability of the capital markets.

On Friday, a Supreme Court decision was announced, overturning a longstanding legal standard known as Chevron deference, which enabled federal agencies and their subject matter experts to interpret ambiguous statutes.

The undoing of this doctrine is expected to lead to inconsistencies across the lower courts, if some strike down and others uphold the same regulatory guidance. In turn, businesses and investors would be forced to contend with years of inconsistent and unreliable guidance, as the courts work to resolve potentially conflicting regulatory standards across states.

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Coalition on Inclusive Economic Growth Urges the SEC to Propose Human Capital Management Rule

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In partnership with B Lab U.S. & Canada and over 50 investor, business and philanthropic organizations, the U.S. Impact Investing Alliance sent a letter to SEC Chair Gary Gensler urging movement on the long-awaited rulemaking on corporate human capital management (HCM) disclosures. 

Investors are increasingly demanding clear, consistent and comparable information on material considerations such as a company’s workforce composition, compensation, health and safety, and diversity practices. In response to calls from investors, we encourage the Commission to pursue a comprehensive set of HCM disclosure requirements including universal quantitative and supplementary qualitative and information. 

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Opportunity to Support Milestone Regulations for Corporate Climate Transparency

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For years, investors have been demanding access to clear, consistent and comparable data from corporations on their climate risks and impacts. Last month, the SEC helped bring U.S. capital markets regulations into the 21st century by finalizing the climate disclosure rule, joining global regulators and standard setters in the pursuit of mandated, standardized corporate climate disclosures.

Unfortunately, the rule is now under attack, and impact investors must raise their voices in support at this critical moment. As the Alliance noted in our recent statement, we believe the SEC’s final rule represents an important baseline to build upon in the future, even with some provisions weakened from the original proposal. The SEC struck a careful balance based on significant consultation with investors, companies and other market stakeholders.

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U.S. Impact Investing Alliance Applauds EPA Announcement of Greenhouse Gas Reduction Fund Awardees

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Last week, the impact investing community celebrated an important step forward in ensuring that U.S. communities' priorities are centered in the clean energy transition. The Environmental Protection Agency (EPA) announced the eight recipients of funding under the Greenhouse Gas Reduction Fund’s (GGRF) National Clean Investment Fund and Clean Communities Investment Fund. 

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U.S. Impact Investing Alliance Applauds Milestone Regulation for Corporate Climate Disclosure

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Today, the U.S. Impact Investing Alliance applauds an important milestone for corporate transparency on climate factors. The Securities and Exchange Commission (SEC) released a long-awaited final rule requiring U.S.-listed companies to disclose information related to climate-related risks and their material impacts.

“Climate risk is financial risk, and investors need access to clear, comparable data on these factors from companies to inform their decisions,” said Fran Seegull, President of the Alliance. “Though there is room to strengthen certain provisions, we still believe the SEC’s final rule marks progress in advancing fair and efficient markets. Today signals a win for investors, U.S. economic competitiveness and market stability.” 

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President’s Veto Protects Transparency, Accountability and Fairness for Small Businesses

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It is essential that our regulators prioritize enhancing transparency and accountability for the small business ecosystem. The U.S. Impact Investing Alliance applauds President Biden’s veto to protect significant strides made toward this goal by the Consumer Financial Protection Bureau (CFPB) earlier this year.

The President’s veto rejects a Congressional Review Act Resolution that would have nullified the long-awaited implementation of a Dodd-Frank provision requiring small business lenders to collect demographic information about their clients and applicants.

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U.S. Impact Investing Alliance Applauds Historic Modernization of the Community Reinvestment Act

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Earlier this week, U.S. banking regulators released long-awaited  rules finalizing transformative reforms to the 1977 Community Reinvestment Act (CRA). The Alliance applauds the regulating bodies for taking this action, which represents the most significant effort to modernize and strengthen the CRA in nearly 30 years.

Conceived in the wake of the civil rights movement, the CRA was enacted to rectify the historical practices of redlining by requiring banks to equitably serve their communities. The CRA has been instrumental in shaping the community investing ecosystem, flowing capital to community development financial institutions (CDFI) and minority depository institutions (MDI) that serve as critical intermediaries in underserved communities. That said, the CRA has yet to fulfill its core purpose.

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Climate. Capital. Communities. Cross-Sector Leaders Call for Transformative and Equitable Climate Action

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By: Fran Seegull

Accelerate the shift to climate investing. Leverage the power of public-private partnerships. And center the needs of communities.

These were some of my key takeaways from this year’s Climate Week NYC, where I had the privilege of convening with dozens of climate finance and community investing leaders. The U.S. Impact Investing Alliance teamed up with our partners at the Ford Foundation and ImpactAssets to organize a series of curated discussions on accelerating the shift to climate investing, the power of public and private sector collaboration, and the importance of investing at the intersection of climate and communities.

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Alliance Supports Effort to Clarify ESG Fund Names

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Today, the Securities and Exchange Commission voted 4-1 to support final rules addressing investment fund names, including those that purport to factor ESG criteria in investment decision making. A key goal of this update was to address "greenwashing" and other activities that could mislead investors about the sustainability or impact considerations of an investment fund. The U.S. Impact Investing Alliance was broadly supportive of this effort when proposed rules were released last year.

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U.S. Impact Investing Alliance Applauds California Policymakers’ Historic Step to Enable Sustainable Investing

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The U.S. Impact Investing Alliance applauds the California Senate and General Assembly passage of a historic set of bills that would have far-reaching implications for the disclosure of material climate-related information to investors and other stakeholders. The bills now head to Governor Newsom’s desk for signature.

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U.S. Impact Investing Alliance Applauds ISSB on Issuance of First Set of Standards

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The U.S. Impact Investing Alliance applauds the International Sustainability Standards Board (ISSB) for the issuance of its inaugural global sustainability standards. This significant development will establish a global baseline for sustainability and climate-related disclosures by companies and lays the foundation for further progress in the years to come.

The ISSB, established by the IFRS Foundation in 2021, has worked diligently to set meaningful standards, which are poised to promote greater consistency in sustainability reporting across more than 140 jurisdictions worldwide. The Alliance has consistently supported the ISSB’s efforts, including voicing support for the ISSB’s exposure drafts last year. With the standards now in place, more than 140 jurisdictions around the world will begin the work of implementing them.

As the ISSB Standards are officially launched, we join the global impact investing community in celebrating this important milestone that will enable companies to provide decision-useful sustainability information to investors.

Looking ahead, the Alliance will continue to engage with other standard setting initiatives, such as the SEC’s transparency regulatory agenda in the United States to support global cohesion on sustainability disclosures.

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U.S. Impact Investing Alliance Endorses New Legislation to Advance Employee Ownership

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The U.S. Impact Investing Alliance celebrates the introduction of a bipartisan, bicameral bill that will help catalyze employee ownership across the United States.

Owning a business is a key pathway to creating wealth and economic opportunity. Employee ownership models help democratize that pathway, by empowering workers and giving them a stake in the long-term success of not only their business, but their local economies.

The Employee Equity Investment Act (EEIA) builds on the existing Small Business Investment Company (SBIC) program to attract private investment capital to help create and grow employee owned businesses.

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U.S. Impact Investing Alliance Voices Support for ESG Integration in Investment Decision-Making Ahead of House Committee Hearing

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The integration of environmental, social and governance (ESG) factors into investment decision-making is an important tool for investors to consider financially relevant information. Actions at the federal and state-level to attempt to block consideration of ESG factors threaten investors and retirement savers who are depending on long-term financial returns.

In advance of a hearing in the House Committee on Oversight and Accountability, “ESG Part I: An Examination of Environmental, Social, and Governance Practices with Attorneys General,” the U.S. Impact Investing Alliance emphasized its support for protecting the rights of investors to access ESG tools and strategies with Committee leaders.

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Policy Corner: Public investment alone cannot achieve the goals of U.S. industrial policy

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By: David Wood, Aaron Cantrell, Melanie Brusseler

Originally Published In ImpactAlpha’s Policy Corner On April 18, 2023. Read The Article Here.

A new paradigm for U.S. industrial strategy

The IRA, IIJA, and CHIPS Act iconize a new era in US green industrial strategy: a narrow definition of redressing “market failures” is giving way, on both sides of the aisle, to a more constructive vision of the public sector’s role in building an equitable and sustainable economy.

Industrial policy incorporates a wide range of carrots and sticks, including trade and procurement policies, financial and industrial regulation, and labor policies. But it is public investment that, when done well, can create a center of gravity that other policy tools can’t provide: for building infrastructure and productive capacity to deal with the climate crisis, driving equitable growth, and enhancing resilience in historically marginalized communities.

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Historic Funding Disbursed for Community Lenders

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The U.S. Impact Investing Alliance has long called for robust support for the community lenders that serve as the backbone of the community investing ecosystem. Especially in light of the COVID-19 crisis, these community development financial institutions (CDFI) and minority depository institutions (MDI) were critical in flowing capital to the small business owners and community members who needed it the most.

This week, we celebrate the Treasury Department’s announcement that the CDFI Fund has awarded over $1.73 billion in grants to 603 CDFIs through the Equitable Recovery Program (ERP).

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Policy Corner: How the U.S. can boost community financial institutions to counter bank consolidation and bridge racial wealth gaps

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By: Beth Bafford And Bulbul Gupta

Originally published In ImpactAlpha’s Policy Corner on March 29, 2023. Read the article here.

The collapse of Silicon Valley Bank and Signature Bank sent depositors fleeing into the arms of large “Systemically Important Banks,” even after the federal government stepped in aggressively to restore confidence and calm markets.

Too-big-to-fail banks may help individuals and businesses feel better about the safety of their accounts in the short-term. But the shift will be devastating for lower-income families, small businesses, and communities of color if the federal government doesn’t counterbalance their emergency efforts with major, long-term commitments to the community finance sector.

Such support is not only good policy. It is essential to build trust with communities who feel that large banks – which often exclude community members from financial inclusion and access to capital – are always bailed out at their expense.

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U.S. Impact Investing Alliance Applauds President Biden’s Actions to Protect American Workers’ Financial Security

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The U.S. Impact Investing Alliance is encouraged by the Biden-Harris Administration's continued support for the financial security of American workers. Today, President Biden vetoed a politically motivated attempt to reverse a Department of Labor (DOL) rule that allows the consideration of financially relevant environmental, social and governance (ESG) factors in certain retirement savings plans.

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Policy Corner: The state of impact investing public policy – and opportunities for 2023

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The past year has been one of both exciting growth and unexpected challenges for the impact investing industry. Amid an uncertain macroeconomic forecast and complex geopolitical circumstances, the market eclipsed $1 trillion in assets under management for the first time. The field’s evolution has been driven by steady investor demand for impact and ESG products, increased focus on impact measurement and management, and of course, critical public policy developments. 

The question on the minds of many leaders in this field is: “Where do we go from here?” The answer, I believe, is to drive toward more and deeper impact, taking care that the field scales with impact integrity.  

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U.S. Impact Investing Alliance Submits Recommendations to Federal Policymakers on Community Investing Best Practices

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The U.S. Impact Investing Alliance writes in support of a cross-agency initiative by the federal government to reflect on their collective role in generating positive economic outcomes for communities, with an eye toward racial equity.

Specifically, the Alliance responded today to a request for information (RFI) from the newly formed Interagency Community Investment Committee (ICIC) on how to improve the impact of federal community investment programs.

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U.S. Impact Investing Alliance Testifies Before House Subcommittee on Corporate Human Capital Management Disclosures

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Earlier today, Fran Seegull, President of the U.S. Impact Investing Alliance, testified at a House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets hearing on E, S, G and W: Examining Private Sector Disclosure of Workforce Management, Investment, and Diversity Data.

Seegull’s testimony emphasized the need for the Securities and Exchange Commission (SEC) to pursue a rulemaking on standardized corporate human capital management disclosures, which are critical factors for investor decision-making.

 

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