EARLY INNINGS — Supporters of sustainable investing have reasons to feel good about the state of play in their battle against GOP-led backlash, as anti-ESG efforts meet lukewarm lawmaker support and voter indifference. But nobody's ready to declare victory just yet in the battle over environmental, social and governance principles as financial firms that were once driving the conversation remain on the sidelines. We’ve reported on the deliberations and internal divisions within the anti-ESG movement. But it remains to be seen whether the disparate parties on the opposing side — financial firms, climate activists and progressive policy makers — will be able to coalesce around a unified response against what’s expected to be another round of attacks in 2024. The odds against forming a coalition are long, given longstanding antipathy — environmental activists were beating up on Wall Street long before the right weighed in — and the fact that the financial firms bearing the brunt of the attacks appear to have been spooked into radio silence. Sustainable investing supporters like US SIF, Ceres, For the Long Term, and Americans for Financial Reform are communicating better than they did when the anti-ESG movement started, but it’s more about information-sharing than hashing out the details of an advertising, lobbying and social media strategy, said Bryan McGannon, US SIF’s managing director. “It’s less of a structured campaign apparatus,” said McGannon, who wants to “hone the investor voice” on this issue in the future. The reticence of Wall Street firms and their trade groups is understandable given the competing pressures from anti-ESG politicians urging them to scrap sustainable investment policies and environmentalists pushing them to go faster. But the silence is frustrating for those who cheered BlackRock Chair and CEO Larry Fink and others who once advocated for the green transition. Case in point: BlackRock, along with the Bank Policy Institute and the Securities Industry and Financial Markets Association, declined to speak on the record for today's Long Game. Of course, BlackRock is a company, not a political campaign, but the pro-ESG side looks at the success of state bankers groups in watering down some of the most extreme proposals in deep red states and wonder what could have been with Wall Street’s help. “I’ve had a lot of hard conversations with some big bank CEOs over this issue,” said Rep. Sean Casten (D-Ill.), who co-chairs the Congressional Sustainable Investment Caucus. “I think a lot of them are afraid of alienating the Republican Party.” Still, given that House Republicans’ anti-ESG legislation is likely to go nowhere, the lack of traction with voters reflected in polling and the silence on the issue in the first two GOP presidential debates, sustainable investment advocates are feeling pretty good. “The attacks have helped to create greater unity and consensus amongst treasurers and comptrollers around the country just in the same way that they've helped to create more consensus amongst groups that have differing views on divestment and engagement,” said David Wallack, executive director of pro-ESG nonprofit For The Long Term. “It's not that everybody agrees on everything, but it has sharpened us.”
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