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EXCLUSIVE: Republican leaders on the House Financial Services Committee are creating a first-of-its-kind task force to coordinate their response to various proposals related to the environmental, social and governance (ESG) movement.
Financial Services Committee Chairman Patrick McHenry, R-N.C., said Friday that the ESG working group would lead the Republican effort to combat the threat ESG policies pose to U.S. capital markets. He added that Financial Services Oversight Subcommittee Chairman Bill Huizenga, R-Mich., would lead the initiative and appointed another eight GOP committee members to serve on the working group.
"Progressives are trying to do with American businesses what they already did to our public education system—using our institutions to force their far-left ideology on the American people," McHenry said in a statement shared with Fox News Digital. "Their latest tool in these efforts is environmental, social, and governance proposals. This is why I am creating a Republican ESG working group led by Oversight & Investigations Subcommittee Chair Bill Huizenga."
"This 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," he continued. "Financial Services Committee Republicans as a whole will continue our work to expand capital formation, hold Biden’s rogue regulators accountable, and support American job creators."
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Rep. Patrick McHenry, R-N.C., speaks alongside fellow Republicans during a news conference on May 12, 2022. (Ting Shen/Bloomberg via Getty Images)
According to McHenry, the working group will be focused on reining in regulatory overreach from the Securities and Exchange Commission (SEC), reinforce the materiality standard — which requires corporations to disclose key information to investors — "as a pillar" of the financial disclosure regime and hold those who misuse the proxy process that gives shareholders a saying in company decisions accountable.
The task force will ultimately organize Republican efforts to fight back against the ESG movement, educate congressmen on the issues and develop policy proposals.
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"Last year, the Supreme Court ruled in West Virginia vs EPA that government bureaucracies cannot arbitrarily expand their own regulatory reach," Huizenga said in a statement. "The SEC’s climate disclosure rule is a prime example of this overreach that would have a wide-ranging impact on hard-working Americans across all walks of life."
"I look forward to leading our committee’s ESG working group, which will focus on promoting strong, vibrant capital markets, while defending the interests of all retail investors," the Michigan lawmaker added.
In addition to Huizenga, fellow committee members Reps. Ann Wagner, R-Mo., Barry Loudermilk, R-Ga., Bryan Steil, R-Wis., Andrew Garbarino, R-N.Y., Byron Donalds, R-Fla., Monica De La Cruz, R-Texas, Erin Houchin, R-Ind., and Andy Ogles, R-Tenn., will serve on the working group.
Securities and Exchange Commission Chairman Gary Gensler has led the charge on a climate disclosure rule that Republicans have characterized as dangerous. (Reuters/Jose Luis Magana)
The ESG movement, which has picked up steam over the last few years, broadly seeks to promote a green energy transition and left-wing social priorities through the financial sector and major corporations.
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It has largely been spearheaded by massive trillion-dollar asset managers and financial institutions like BlackRock, State Street and Vanguard, which have used their large stakes in large companies to push the adoption of ESG standards. The firms often utilize their outsized influence during the proxy voting process.
The movement has also been supported by Democratic lawmakers and the Biden administration which has moved ahead with various ESG actions over the last 12 months.
For example, in March 2022, SEC Chairman Gary Gensler, who President Joe Biden appointed a year earlier, unveiled rules requiring publicly-listed companies to disclose climate-related information, an action that Republicans and business industry leaders warned may be unconstitutional.
And late last month, a Labor Department rule went into effect allowing retirement plan managers to factor ESG standards into investment decisions.
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