GUIDE TO THE ANTI-ESG GALAXY — Gas stoves got you down? Wishing you could vote the shares of your passively managed fund? Congressional Republicans have your back with a flurry of bills aimed at countering perceived regulatory overreach in sustainable investing. Eleanor Muller and Zach Warmbrodt have a handy primer on the GOP's political backlash. Among the bills being introduced and contemplated: — Reps. Andy Barr (R-Ky.) and Rick Allen’s (R-Ga.) Ensuring Sound Guidance Act, which would require investment advisers and ERISA retirement plan sponsors to prioritize profits over ESG factors. — Reps. Blaine Luetkemeyer (R-Mo.) and Bill Huizenga's (R-Mich.) Investor Democracy is Expected Act would require passively managed funds, like index funds, to let investors — rather than advisers — vote shares. — Rep. Bryan Steil's (R-Wis.) Putting Investors First Act would boost SEC oversight of proxy advisory firms like Glass Lewis and Institutional Shareholder Services. — Sen. Mike Rounds' (R-S.D.) Mandatory Materiality Requirement Act would put limits on the SEC’s ability to issue new disclosure requirements for public companies. FORT MCHENRY — All these bills will have to get through the House Financial Services Committee, where incoming chair Rep. Patrick McHenry (R-N.C.), is facing a restive group of GOP members agitating to take on ESG, as Emma Dumain and Adam Aton report for POLITICO's E&E News. “We’ve got a blank slate,” said Rep. Ralph Norman (R-S.C.), one of several committee members who won concessions from House Speaker Kevin McCarthy (R-Calif.) in his messy leadership fight earlier this month. “So we’re gonna look at ESG.” McHenry has sounded a moderate note, saying last month that he supported aspects of ESG that can have “significant bearing on economic outcomes,” such as corporate governance. He also said “some legislation being kicked around is misguided" and “plays politics with corporations, in the name of having corporations not play politics.” He said in a statement that the panel would focus on both “activist regulators and market participants who have an outsized impact" and singled out the SEC's climate disclosure rule as an area of focus. On the rest, he said, “we’ll lay that out in the coming months.” McHenry-watchers on all sides are hopeful. Myron Ebell, director of the Competitive Enterprise Institute’s Center for Energy and Environment, called McHenry “a really good, free-market conservative” and “a very intelligent guy” who “might become somewhat more negative on ESG” as he learns more about the issue. Committee member Rep. Sean Casten (D-Ill.), who launched a "Sustainable Investment Caucus" this week, drew an optimistic comparison between McHenry and former House Speaker Nancy Pelosi (D-Calif.). “She liked to talk about managing the exuberances in our caucus,” he said. “And I was glad to see Mr. McHenry sort of tamp down some of the exuberances of his.”
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