PLANADVISER’s Post

IMPENDINING SUPREME COURT RULING COULD PLAY A CRITICAL ROLE IN BIDEN ESG INVESTING RULE U.S. Supreme Court Ruling on Agency Powers May Impact Biden ESG Investing Rule https://hubs.la/Q02hcH1y0 #supremecourt #powers #biden #esg #environmental #social #governance #investing #energyindustry #oilandgasindustry

Considering sustainability data isn’t going anywhere. It is common practice by investors everywhere to use this information to assess risk and opportunities when evaluating companies. Bills pushed in state legislatures by special interest groups with ties to the oil and gas industries are failing and the movement to restrict access to this necessary data is crumbing. I broke down what’s going on in this piece with Nell Minow, vice chair of ValueEdge Advisors LLC, a corporate governance consulting firm.   https://lnkd.in/gsWXzXXY

"Broad anti- and pro-ESG policy laws are just what they sound like: general policies — statewide statutes, rulings from top officials, or more limited guidance issued by pension funds or boards — that either seek to discourage or encourage the state to pursue ESG investments and contracts. A representative anti-ESG policy can be found in a memo from Indiana's attorney general: He quoted a law that required state funds to be used 'solely in the interest of the beneficiaries,' and that investing 'to further general environmental, social, or governance goals, violates' fiduciary duties in existing statutes. On the other hand, the Oregon Investment Council (which oversees public pension funds in that state) has a pro-ESG policy. It reads: 'The consideration of ESG factors...is important in understanding the near-term and long-term impacts of investment decisions.'" Eli Lehrer #esg #publicpolicy #policyresearch

📝US Legal and Compliance Issues Relating to ESG for Private Fund Advisers Debra Franzese, Nicholas Miller,  S. John Ryan and Charlie Enberg of Seward & Kissel LLP discuss the current landscape in the US with respect to regulatory and enforcement matters for both SEC-registered investment advisers and other advisers, including steps that a private fund adviser can take to implement ESG within both its investment process and its compliance procedures. Plus ESG considerations for private fund advisers raising capital from Employee Retirement Income Security Act of 1974 plans, for both plan asset and non-plan asset funds. Full article available to read here 🔗 https://lnkd.in/euyhWbn4

On ESG, the USA is becoming a Nation Divided: The ESG Fight at the Federal and State Level; ESG practices are being adopted by many companies and investors, but as they continue to grow, so does the opposition. As of August 2023, 22 states have adopted some form of ESG legislation. 18 of these states have adopted anti-ESG laws, while only 4 have adopted pro-ESG laws. Recently Introduced Anti-ESG Federal Legislation At the end of July, House Republicans introduced a slew of anti-ESG legislation to combat ESG-friendly legislation and the anticipated SEC rules. The following bills were introduced: H.R. 4790 – The Guiding Uniform and Responsible Disclosure Requirements and Information Limits Act This bill would amend the federal securities laws to create a Public Company Advisory Committee within the SEC to protect investors and market fairness. Additionally, the bill would limit mandated disclosures requirement, such as those in the proposed SEC rules. H.R. 4655 – The Businesses Over Activists Act H.R. 4767 – The Protecting Americans’ Retirement Savings from Politics Act State ESG Legislation Notable anti-ESG states include Alabama, Arkansas, Florida, Idaho, Indiana, Kansas, Kentucky, Montana, New Hampshire, North Carolina, North Dakota, Texas, Utah, and West Virginia. A key theme in anti-ESG legislation from these states is the ban on the use of ESG criteria when managing public retirement systems or public funds. ESG opponents feel that the use of ESG criteria greatly harms beneficiaries, as it has the potential to lead to lower returns. Typical anti-ESG legislation includes a ban on the use of ESG criteria when making investment decisions that involve public funds. This may include an emphasis on fiduciary duties or a prohibition on divestment from certain industries. Indiana took this concept one step further in House Enrolled Act No. 1008, by prohibiting public retirement systems from contracting with service providers who make any “ESG commitments.” Idaho passed a similar law, House Bill 190, which bans banks and credit unions that hold state funds from boycotting an individual or company because of its affiliated industry. Listed industries include fossil-fuel based energy, timber, minerals, agriculture, and firearm sales, manufacturing. The law became effective July 1, 2023. The most comprehensive anti-ESG legislation to date is Florida’s House Bill 3. ESG criteria may not be used when making public pension investment decisions, local government investment decisions, or awarding state or local contracts to vendors. Additionally, the issuance of ESG bonds are prohibited. Florida will likely influence future anti-ESG legislation throughout the country. https://lnkd.in/gkeVTsXv

Thanks Emanuela (Emmy) Hawker and ESG Investor for digging further into this issue and recent developments in the UK policy space. Corporate governance (and audit in particular!) may seem like a dry and unfashionable topic but it's fundamental to everything else we try to achieve as long-term investors #corpgov #stewardship

After what one lawmaker dubbed "ESG month," a conservative movement pushing back against the investing principles and data has gained more policy substance through bills and hearings. What's less clear is whether that growing political action will stem the flow of tens of trillions of dollars in assets invested into products tied to ESG criteria. Here's a look at the report, hearings and legislation advanced by Republican members of the U.S. House Committee on Financial Services, with insights on the political discussion surrounding ESG from Zach Teutsch of Values Added Financial, Thomas Mancuso, AIF® of The BAD Investment Co. and Andrew Behar of As You Sow. #esg #esginvesting #investing #portfoliomanagement #financialadvisors #assetallocation #impactinvesting #sri #sociallyresponsibleinvesting https://lnkd.in/e25Xhh4d

Responsible Investor have published an excellent article discussing the potential impact that investors pre-disclosing voting intentions can have on their engagement with companies. This strongly reminds me of an article I first wrote when joining NorthPeak Advisory, discussing how "Anticipated Reactions" in the UK House of Commons could be replicated within an investor's Stewardship approach. "Anticipated Reactions: Where the government regularly adjusts its behaviour due to internalising the legislature’s likely reaction to proposed pieces of legislation". "Anticipated reactions signal the importance for investors to fully use their engagement capabilities. If boards are beginning to internalise that a majority of shareholders are likely to vote for ESG proposals, reprimand or even choose not to re-elect them over poor ESG performance, they will be more incentivised to engage with shareholders". For those interested, I have linked both articles below: https://lnkd.in/epKaFS5r https://lnkd.in/eM2aV57g #esg #responsibleinvestment #stewardship #engagement #proxyvoting #corporatesustainability