Public Policy

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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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U.S. Impact Investing Alliance Applauds New Rule from Department of Labor that will Protect the Economic Security of American Workers

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The U.S. Impact Investing Alliance celebrates a clear win for American workers today with the release of a final rulemaking by the Department of Labor (DOL), which ensures their retirement savings will be invested in line with prudent risk management practices.

The rule thoughtfully modernizes expectations for fiduciaries under the Employee Retirement Income Security Act (ERISA) to consider financially material environmental, social and governance (ESG) factors including climate change to protect retirement savers and promote a resilient economy.

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U.S. Impact Investing Alliance Comments on the Midterm Elections and What it Means for Advancing an Equitable Economic Growth Agenda

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Even as ballots are still being counted in Congressional, state and local elections, it is clear that voters want an economy defined by equitable opportunities for themselves, their families and their communities. Though the exact policy prescriptions are subject to debate, Americans are united around attaining this shared prosperity.

The U.S. Impact Investing Alliance has long held the belief that the principles of impact investing are nonpartisan and capable of bringing together allies across the political spectrum to champion the flow of private capital for public good.

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Celebrating Government-Led Commitments to Equity and Community Investing Priorities

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This week, leaders from the public, private, nonprofit and philanthropic sectors convened at the Treasury Department’s Freedman’s Bank Forum to consider their joint role in addressing economic disparities and promoting economic opportunities in communities of color. The U.S. Impact Investing Alliance congratulates the newly announced members of Treasury’s Advisory Committee on Racial Equity, representing community development finance experts, philanthropies, investment professionals and more.

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U.S. Impact Investing Alliance Applauds Historic Climate Action by Congress

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Earlier this week, the White House and Congress made strides toward achieving a number of climate, health care, and tax priorities by passing the Inflation Reduction Act in the Senate. The U.S. Impact Investing Alliance is particularly encouraged to see the inclusion of a $27 billion "green bank" facility to help finance clean energy projects, within the $370 billion dedicated to climate programs.

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Policy Corner: The S.E.C.’s new rules (Part Two): Five features of the ESG proposal that warrant attention from investors

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[Originally published in ImpactAlpha’s ‘Policy Corner’] I recently wrote about the transformational pair of proposed rules from the SEC that would, at long last, lend clarity and comparability to the ESG investing market. You can read my analysis of the two rulemakings – the Fund Names Rule Amendment and ESG Disclosure Rule – in an accompanying ImpactAlpha article. The two proposals contain a number of features likely to be of enormous importance to investors concerned about greenwashing and other deceptions regarding ESG funds by asset managers. I discuss five below that deserve focused attention in technical comments due to be filed with the SEC by its August 16 deadline.

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Policy Corner: The SEC’s new rules (Part One): An opportunity to rein in greenwashing in asset management

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[Originally published in ImpactAlpha’s ‘Policy Corner’] Fossil fuel industry-supported activist groups and politicians have launched a campaign to discredit ESG investing as “woke capitalism.” This new push appears to be part of the broader fossil fuel industry-supported disinformation campaign, which has moved beyond climate change denialism into cultural warfare and dismissal of concerns about social and environmental justice as elitist and hypocritical. As this anti-woke capitalism campaign moves to the Congressional arena, investors must speak out and defend their rights to deploy their assets as they see fit, including, if they so choose, divestment from fossil fuels.

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Policy Corner: Ensuring the Community Reinvestment Act addresses the racial wealth gap, as intended

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[Originally published in ImpactAlpha’s ‘Policy Corner’] More than 40 years after the Community Reinvestment Act was put in place to undo racist policies in banking, the racial wealth gap persists. New CRA regulations cannot continue to be color blind. Enacted in 1977, the Community Reinvestment Act (CRA) came out of the civil rights movement. The CRA affirmatively obligates banks to serve the entire community in which they are located. In passing this law, Congress acknowledged the banks’ failure to serve the whole community in the past, and the essential need for banks to do so. Line drawing is not permissible.

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Policy Corner: Keeping communities at the center of equitable infrastructure by reimagining risk, power and accountability

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[Originally published in ImpactAlpha’s ‘Policy Corner’] Largely missing from conversations around the $1.2 trillion bipartisan infrastructure deal has been an acknowledgement of the impact of past infrastructure investment to underserved communities, notably Black, Indigenous and low-wealth communities. The Infrastructure Investment and Jobs Act, along with the American Rescue Plan, affords this nation with the opportunity to repair past harm while building infrastructure that serves the needs of underserved communities.

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Policy Corner: Rules and regulatory trends impact investors should be tracking

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[Originally published in ImpactAlpha’s ‘Policy Corner’] Public policy and regulatory action have helped accelerate and catalyze the flow of private capital for public good for decades. The historic regulatory moment we find ourselves in, marked by significant movement on landmark policies, calls for attention and action from actors across the impact investing ecosystem. Below are specific opportunities to raise your voice and help shape regulations that will impact the future of our field.

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U.S. Impact Investing Alliance Applauds Banking Regulator’s Guidance on Climate-Related Risks

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The U.S. Impact Investing Alliance wrote to the Federal Deposit Insurance Corporation (FDIC) today in support of their draft guidance for large banks managing climate-related financial risks.

Investors and the broader public are relying on financial institutions to account for the significant, systemic risks posed by climate change in a prudent manner.

The FDIC’s guidance helps provide clarity to banks on how to do so and is an important element of a whole-of-government approach for ensuring a future economy that is resilient and strong.

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Impact Investors Support SEC’s Leadership on Climate Transparency

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Earlier today, the U.S. Impact Investing Alliance submitted comments in support of the U.S. Securities and Exchange Commission’s (SEC) proposed rule to enhance and standardize climate-related corporate disclosures. This represents a historic moment for impact transparency, as investors have long been calling for accessibility to clear, comparable data related to environmental, social and governance (ESG) factors. The Alliance’s comments communicate broad support for the proposal, which is squarely in line with the SEC’s mandate to protect investors, maintain fair and efficient markets and facilitate capital formation.

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Regulatory Progress Toward Transparency in ESG Investing

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Earlier today, the U.S. Securities and Exchange Commission (SEC) proposed two sets of rules that will help shed light on the practices of investment funds and advisors that incorporate environmental, social and governance (ESG) investment factors into their strategies.

The U.S. Impact Investing Alliance is encouraged by the SEC's latest actions to help equip investors with clear, comparable and reliable information about the true nature of their investments and improve overall transparency and accountability across the capital markets.

The Alliance looks forward to reviewing the proposals in depth and providing comments regarding specific provisions and potential areas for strengthening the final rule.

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Department of Labor Seeks to Protect Retirement Savers from Climate-Related Financial Risks

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The U.S. Impact Investing Alliance was pleased to respond today to a Request for Information on how the Department of Labor can protect retirement savers from climate-related financial risks. Alongside specific recommendations for further action and research by the Department, the Alliance is calling for a whole-of-government approach to combatting the significant, systemic risks climate change poses to the economy. Read the Alliance’s full comments here.

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Banking Regulators Set out to Strengthen Foundational Community Investing Policy

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Earlier today, the Federal Deposit Insurance Corporation (FDIC), Federal Reserve and the Office of the Comptroller of the Currency (OCC) proposed significant reforms to the Community Reinvestment Act (CRA), an anti-redlining banking policy with roots tracing back to the civil rights movement. While the CRA has been catalytic, the racial wealth gap and access to capital divides persist, and the U.S. Impact Investing Alliance is supportive of the regulators’ latest efforts to modernize and strengthen the policy’s underlying framework.

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U.S. Impact Investing Alliance Celebrates Historic Step Forward on Corporate Climate Disclosure and Impact Transparency

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Today marks a major milestone for the impact investing community and its longstanding efforts to manifest a more equitable, inclusive and sustainable economy. The U.S. Impact Investing Alliance applauds the SEC for their leadership in advancing new climate reporting requirements for U.S.-listed companies, which represents one of the boldest steps a U.S. regulator has taken toward accounting for the risks of climate change to our economy in a transparent and meaningful way.

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Policy Corner: From wage earners to asset owners: A policy agenda for employee ownership

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[Originally published in ImpactAlpha’s ‘Policy Corner’] In an increasingly divided economy, how can impact investors transform the American workforce from wage earners into asset owners? Impact investors looking for strategies to build a more inclusive and dynamic American capitalism should support public policies designed to accelerate the investment potential of employee ownership.

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Policy Corner: Agents of Impact eye corporate disclosure rules on climate and human capital

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[Originally published in ImpactAlpha’s ‘Policy Corner’] Healthy and functioning markets depend on transparency and accountability. Impact investors have long understood that this extends to a need for information on companies' behavior and impact on the world around them. Now, amid the growing urgency of the climate crisis and the cost of inequality, regulators are taking notice too.

 

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