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Policy Corner: Reclaiming ESG as pro-business and pro-worker

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By: Fran Seegull

Originally Published In ImpactAlpha’s Policy Corner On September 14, 2022. Read The Article Here.

Right-wing politicians at both federal and state levels have started latching onto the well-known term of “ESG” as the new scapegoat for all things wrong with the economy. While ESG refers simply to an assessment framework for risk and opportunity that is widely accepted and growing in popularity among the investor and business communities, anti-ESG pundits have called it everything from “woke” to “leftist” to “the devil incarnate.”

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Podcast: State of the Field and Practice of Impact Investing: Episode 68 of Money + Meaning

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Impact investors increasingly see their work alongside broader movements, such as reimagining systems, shifting power, promoting equity, combating the climate crisis and more. Tune into the Money + Meaning Podcast to hear from Fran Seegull, Monique Aiken and Cathy Clark on their reflections on the state of the impact investing field and predictions for the year ahead.

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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 Supports Latest Regulatory Win for Investor Transparency

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The U.S. Impact Investing Alliance expressed support for the latest iteration of the U.S. Securities and Exchange Commission’s (SEC) disclosure agenda to improve transparency for investors. In addition to expressing broad support for the SEC’s objectives to combat greenwashing and equip investors with decision-useful information, the Alliance’s comments focused on ways the Commission could expand the scope and refine certain provisions in the final rule.

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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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U.S. Impact Investing Alliance & Peers Call for a Strengthened and Race-Conscious Community Reinvestment Act

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Today, the U.S. Impact Investing Alliance joined many of our peers on the Coalition on Inclusive Economic in supporting the most meaningful update to a foundational community investing policy in nearly 30 years. The Alliance and 15 organizations representing businesses, investors, nonprofits and community lenders submitted comments to the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) in response to their joint rulemaking to reform the Community Reinvestment Act (CRA).

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U.S. Impact Investing Alliance Signals Support for ISSB Proposals that Lay the Groundwork for Global Convergence on Sustainability Standards

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The U.S. Impact Investing Alliance is encouraged by the emerging global standards on sustainability disclosures, and we believe that the International Sustainability Standards Board’s (ISSB) latest actions lay the groundwork for further progress over time. Specifically, the Alliance was pleased to write in support of the ISSB’s exposure drafts on general sustainability and climate-related disclosures.

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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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The Field Calls on the SEC to Prioritize Human Capital Management Disclosures

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In partnership with B Lab and nearly 50 investor, business and philanthropic organizations, the U.S. Impact Investing Alliance wrote to SEC Chair Gensler expressing support for the long-awaited rulemaking on corporate human capital management disclosures.

Related: Read more from our President, Fran Seegull, on how impact investors can set the record straight on the state of ESG investing and the policies necessary to promote a fair, efficient and sustainable investment ecosystem.

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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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Policy Corner: Expanding the ‘S’ in ESG to account for the full scope of corporate impact on workers and communities

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[Originally published in ImpactAlpha’s ‘Policy Corner’] From the Great Resignation to the historic worker-organized unionization of an Amazon warehouse in Staten Island, N.Y., worker empowerment represents an increasingly important lever for corporate accountability. The bottom-up grassroots energy, combined with top-down government action, creates a unique opportunity to advance the conversation around the role of corporations in society and the ‘S’ in ESG.

 

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