House Democrats, Reps. Sean Casten (D-Ill.) and Juan Vargas (D-Calif.) announced they would be co-chairing the House Sustainable Investment Caucus (CSIC), which also includes Reps. Bill Foster (D-Ill.), Raúl Grijalva (D-Ariz.), Brad Sherman (D-Calif.), and Emanuel Cleaver (D-Mo.).
The caucus was formed to advocate for sustainable investing — a rapidly growing sector that already accounts for trillions in global investment and is expected to continue growing. The practice of investing in line with ESG measures has drawn interest from the financial sector as well as some opposition from GOP-led states like Texas, Kentucky, Florida, and West Virginia.
Sustainable investment has been hampered by political headwinds that have prevented the implementation of policies that would provide investors with clear, federally guaranteed information about whether or not a given investment is truly sustainable. The Securities and Exchange Commission (SEC), which is expected to release its final climate disclosure rules this spring, is a particular focus of current controversy.
“Given the significant growth of assets under management in funds that prioritize ESG factors, Congress has a duty to craft policies that provide investor protections and transparency of information to market participants,” said Rep. Sean Casten. “I’m excited to partner with Rep. Vargas to bring together Members of Congress and experts to progress past the distortion of facts and have robust, open-minded discussions about sustainable investing.”
Rep. Vargas said the group will inform lawmakers on the benefits of sustainable investment and advise policymaking; host events and discussions with investors, fund managers, companies, and regulators; and support federal agencies, including the SEC, in advancing rules and regulations pertaining to sustainable investment.
Democratic members of the new caucus said they plan to start formal across-the-aisle recruitment talks with moderate Republicans once the caucus is up and running.
The United States currently has about $8.4 trillion invested in ESG funds, according to a December study by the Forum for Sustainable and Responsible Investment (SIF), a sponsor of the caucus. According to Bloomberg, 20 percent of the nearly $41 trillion invested globally in funds marketed as sustainable is expected to hit $53 trillion by 2025.
CSIC also received support from the non-profit Ceres which has a long-standing commitment to sustainable investing and business practices. The organization engages with companies to disclose and address their climate-related risks, advocates for legislation that reduces sustainability risks by guiding the transition to a clean energy economy, and more.
“For decades, Ceres has been working with many of the largest investors and companies in the world to advance sustainable investment and business practices and advocate for the policies and regulations to accelerate those efforts,” said Mindy Lubber, Ceres president, and CEO. “Today, we welcome the formation of the House Sustainable Investment Caucus to help drive better understanding in Congress of the forward-looking and responsible investment practices our economy needs to flourish. Investors in the U.S. and around the world are increasingly aware that sustainability issues like climate change, water scarcity, and biodiversity loss will impact companies, supply chains, workforces, and infrastructure – and that failing to account for the risks and opportunities they present would betray the interests of their beneficiaries and other stakeholders. It is good to see that there is growing recognition of and urgency around this perspective in Congress, as well.”