Climate-friendly ESG investing gets boost from House Democrats

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A group of House Democrats launched the “Sustainable Investment Caucus” Wednesday to promote climate-friendly investing to push back against Republican criticism of environmental, social and governance (ESG) investing principles are “woke” progressive capitalism.

The founders of the caucus, led by co-chairs Sean Casten of Illinois and Juan Vargas of California, said its purpose will be to educate fellow policymakers about the potential benefits of green investing.

“Sustainable investment is here to stay. And as our economy continues to grow, Congress must work with regulators to ensure that market participants receive the information needed to make probable and ethical decisions in our capital markets,” Mr. Vargas said.

But the Democrats also admit they’re playing defense.

Republicans have waged a multi-billion-dollar war on ESG, with red states across the country divesting public pension funds from some of the world’s largest financial institutions and asset managers because GOP officials say ESG is anti-fossil fuel.

The caucus will undoubtedly clash with House Republicans, as the GOP majority plans to combat ESG with legislation and public hearings grilling Wall Street executives.

“We got to be honest: we are also creating this caucus for defensive reasons. One of the oldest rules in Washington is that losers cry louder than winners cheer,” Mr. Casten said. “When capitalism is working well but you’re not winning, you tend to call it woke capitalism. It’s still capitalism.”

Rep. Seth Magaziner, Rhode Island Democrat and a former state treasurer, charged the Republican-led states that have boycotted Wall Street firms and ESG investing with doing a disservice to working-class investors whose long-term financial well-being could be jeopardized.

“Attacks on ESG investing are attacks on working people who are counting on their investment managers to grow their wealth over time,” Mr. Magaziner said.

“Even if you don’t believe that incorporating ESG into the investment process is additive to value over time, you ought to at least believe in the freedom for people to invest as they see fit. That’s the way capitalism is supposed to work,” he said.