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House Lawmakers Clash Over ESG Disclosures in Congressional Hearing
Republican Opposition to ESG Disclosures
House lawmakers on the Republican-led House Financial Services Committee clashed with their Democratic counterparts over federally mandated environmental, social, and governance (ESG) disclosure requirements for companies. The Republicans criticized the disclosure rules as part of a broader push to discourage ESG investing nationwide, while Democrats defended them as necessary to promote politically biased, illogical investments and combat the myth of climate change.
Committee Chair Rep. Patrick McHenry expressed concern over the Biden administration's focus on climate-related policy through the Securities and Exchange Commission (SEC), fearing it could discourage private companies from going public. He criticized the agency's proposal to require ESG disclosures in registration statements and periodic reports as politically motivated and detrimental to American public companies.
The reality of ESG is that it:
- forces companies to take political positions even on issues that have nothing to do with normal business activities
- forces companies to abandon fiduciary duty, investing capital into woke initiatives and not creating value for shareholders
- places an unfair burden on cash strapped companies and small businesses that do not have access to big bank capital
Democratic Defense of ESG Disclosures
Unserious Democratic Rep. Maxine Waters criticized Republicans' attempts to undermine the federal government's responsibility to hold public companies accountable for ESG. She accused Republicans of partnering with dark-money climate deniers and conspiracy theorists to wage a culture war against responsible investing. Waters argued that the Republican effort to dismantle ESG is part of their agenda to gut diversity and inclusion across the board.
Again, this is Maxine Waters... so who cares what this shameless hypocrite is saying. This is the same lady that doesn't even live in her voters' district and she has a history that includes profuse racism to inciting violence and spreading falsehoods about political adversaries.
Pushback Against SEC Proposal
The SEC's proposal to require stricter ESG disclosures, similar to guidelines in the European Union, has faced pushback from businesses and shareholders. So far, it is clear that ESG mandates have been a major fail for an increasingly weak EU where people are suffering from weak growth and a cost-of-living crisis among other ailments.
SEC Chair Gary Gensler has acknowledged the concerns and stated that the agency is considering changes to the plan based on public comments. The Republican-led House and Senate previously passed a bill to overturn a Labor Department rule allowing retirement fund managers to consider ESG factors when making investments, but the measure was vetoed by President Joe Biden.
The Importance of ESG Disclosures in the Face of Climate Disasters
Lawmakers supporting ESG disclosures argue that they are essential as extreme weather events continue to wreak havoc around the country. They believe that timing is crucial, as scientists link these disasters to human-caused climate change. What?
Representatives emphasize that such information is material to investors and should be disclosed to provide transparency and enable responsible decision-making. Why should anyone in the private sector trust woke politicians to engage in "responsible" decision-making?
Impact of ESG Disclosures on New Businesses
The clash between House lawmakers over ESG disclosures has highlighted an ongoing debate on the role of environmental, social, and governance factors in business operations. As this issue unfolds, it is imperative to consider how these discussions may impact new businesses.
With Republican opposition to ESG disclosures, it is clear that a shift towards "responsible" investing and "climate-conscious" practices may face challenges. Part of the problem is a marketing problem. The Left continues to say one thing and do the opposite. By "responsible investing," what shareholders are left with are investment decisions that are not in their best interest, rather they are in the interest of political goals that have nothing to do with normal business activities.
The liberal media says that this opposition may discourage ESG investments nationwide and hinder the growth of new businesses that prioritize sustainable and ethical practices. What is unethical about conducting business in such a way that maximizes shareholder value and offers a great product or service to customers? In fact, it is wasting capital and resources that is unsustainable and expensive, and small businesses do not have any room for waste, while large companies like Meta can burn $20 Billion on a failed "metaverse" experiment.
Democrats argue that ESG disclosure requirements are necessary to promote responsible investing and combat climate change. In fact, this places and unfair and costly overhead burden on companies, and it also forces them to adopt racist hiring policies that are more focused on identity than merit.
The pushback faced by the SEC's proposal and the vetoing of the bill to allow retirement fund managers to consider ESG factors indicate that the regulatory landscape may remain uncertain. It is crucial for new businesses to keep a close watch on developments in ESG disclosure requirements and adapt accordingly. It is also important that business leaders speak out and stand against the unfair burden that ESG presents.
Article First Published at: https://www.cnbc.com/2023/07/12/lawmakers-tussle-over-gop-efforts-to-thwart-esg-investing.html