House Financial Services Committee Republicans Establish ESG Working Group
Commentary by Steven Lofchie
New House Financial Services Committee Chair Patrick McHenry (R-NC) established a Republican ESG Working Group to "combat the threat to our capital markets posed by those on the far-left pushing [ESG] proposals."
Chair McHenry appointed Representative Bill Huizenga (R-MI) to lead the Working Group and to focus on (i) reining in SEC overreach regarding proposed ESG disclosure requirements, (ii) strengthening the materiality disclosure standard and (iii) holding accountable proxy advisors that misuse their influence to push ideological preferences contrary to investor financial interests.
In a statement on the formation of the Working Group, Mr. McHenry said the group will develop a "comprehensive approach to ESG that protects the financial interests of everyday investors and ensures our capital markets remain the envy of the world."
Commentary
With a majority in the House, Republicans should have the ability at the Congressional level to obtain greater information from the SEC, including more testimony and the extent of evidence the agency has to support cost-benefit analyses in its rule proposals. Requiring the SEC to provide more information may, among other things, enable market participants to challenge any rulemaking that exceeds the SEC's statutory authority, or to challenge any rule that was adopted without meeting the requirements of the Administrative Procedure Act.