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The Future of Impact Investing Public Policy: Doubling Down on a More Sustainable, Equitable Economy for All

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Shared prosperity is a shared responsibility.

In recent years, the United States benefited from a robust macroeconomic recovery from the COVID-19 and related crises, particularly compared to its global peers. Yet, despite record employment and historic investments across infrastructure and industry, many people across the country feel that the American dream is increasingly out of reach.

This is a moment that demands more from us as advocates and investors for a sustainable, equitable economy for all.

Read the “Private Capital, Public Good” report.

U.S. Impact Investing Alliance Statement on 2024 Election

The results of the U.S. 2024 elections are a shock to the system – not just to our political system, but also in how our economy operates and our society functions. While the full implications of this moment will take time to understand, there can be no doubt that the communities across the country facing economic, social and environmental hardships need our support more than ever. The private sector must rise to the occasion – not just investors and financial institutions, but also businesses, philanthropies, nonprofits and other civil society organizations. 

Policy Corner: Free markets and impact investing in the aftermath of the Supreme Court’s rulings

By: Fran Seegull

Originally Published In ImpactAlpha’s Policy Corner On July 11, 2024. Read The Article Here.

Impact investing is at a crossroads and in the crosshairs. That is a dichotomy we continue to revisit in our work to grow the practice of impact investing for a more sustainable, equitable economy.

Our field has grown exponentially and entered the mainstream, with the flourishing of funds incorporating ESG, sustainability and impact. There is growing recognition that issues like climate risk are synonymous with financial risk.

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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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Investors and Asset Managers Cannot Afford to Turn Their Backs on Climate Commitments

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Climate risk is financial risk, a reality acknowledged by investors, asset managers, businesses, and regulators across the globe. As institutional investors, we are concerned by the recent departures of several large asset managers from Climate Action 100+, an essential investor-led initiative improving corporate accountability on climate risks in our investment portfolios.

The authors of this statement are leading foundations committed to practicing and promoting the principles of impact investing – investing for measurable and positive social, economic, and environmental impact alongside financial returns. Read the full statement.

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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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The Importance of Safeguarding Impact Investing Principles and Accountability Mechanisms in the Face of Legal Challenges

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The past several months have seen a troubling surge of litigation threatening investor rights and the ability of regulators to respond to market imperatives. These attacks stem from the same desire to halt progress by private sector leaders and regulators toward a more transparent and accountable economic system. The U.S. Impact Investing Alliance has been working to counter the anti-environmental, social and governance (ESG) movement, and we see the same anti-ESG forces now mobilizing to undermine everything from climate disclosures to diversity, equity and inclusion (DEI). This piece analyzes the legal challenges that impact investing advocates should be tracking – some more high-profile than others, but all with the potential for significant ramifications for our collective ability to manifest a thriving, competitive economy.

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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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Coalition on Inclusive Economic Growth Applauds the Department of Commerce’s Robust and Equitable Business Diversity Principles Initiative

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Last week, the Coalition on Inclusive Economic Growth wrote a letter to the Department of Commerce sharing support for the establishment of the Business Diversity Principles Initiative (“BDP Initiative”).

The 60+ members of the Coalition, co-led by the U.S. Impact Investing Alliance and B Lab, represent businesses, investors, and nonprofits, all of whom see the BDP Initiative as a step forward in advancing a more equitable economic landscape. 

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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 Submits Comments on ISSB Work Plan

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The U.S. Impact Investing Alliance responded to the “Consultation on Agenda Priorities” issued by the International Sustainability Standards Board (ISSB). The body, which helps set standards on sustainability-related accounting issues for more than 140 jurisdictions worldwide, released inaugural standards on General Sustainability and Climate-Related Disclosure by companies in June 2023. The latest consultation sought to understand the priorities of investors, business leaders and other stakeholders in determining ISSB’s work plan for the next two years.

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Responding to Attacks on Investor Freedoms and Corporate Accountability

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Amid what some are calling “ESG July” in the House Financial Services Committee, the U.S. Impact Investing Alliance calls on businesses and investors to take a stand in support of investor freedom and American economic competitiveness.

Over the course of the month, the Republican majority in the House of Representatives will hold at least seven hearings attacking everyone from institutional investors to proxy advisors to insurance executives for leveraging ESG tools and strategies. At the end of the month, it is likely that the Financial Services Committee will advance a slate of legislation that undercuts basic investor freedoms and risks harming the economic security of U.S. retail investors and retirement savers.

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Presidents’ Council on Impact Investing Names McKnight Foundation President Tonya Allen as Co-Chair

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U.S. Impact Investing Alliance celebrates new appointment for the key group of philanthropic leaders dedicated to practicing and promoting impact investing

The Presidents’ Council on Impact Investing (Presidents’ Council) announced the appointment of Tonya Allen, President of the McKnight Foundation, as its newest Co-Chair.

Read the full press release.

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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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