ESG counteroffensive is missing big guns – POLITICO – POLITICO

State lawmakers are surrounded by ESG noise. | Courtesy of Consumers Defense

EARLY INNINGS Supporters of sustainable investing have reasons to feel good about the state of play in their battle against GOP-led backlash, as anti-ESG efforts meet lukewarm lawmaker support and voter indifference. But nobodys ready to declare victory just yet in the battle over environmental, social and governance principles as financial firms that were once driving the conversation remain on the sidelines.

Weve reported on the deliberations and internal divisions within the anti-ESG movement. But it remains to be seen whether the disparate parties on the opposing side financial firms, climate activists and progressive policy makers will be able to coalesce around a unified response against whats expected to be another round of attacks in 2024.

The odds against forming a coalition are long, given longstanding antipathy environmental activists were beating up on Wall Street long before the right weighed in and the fact that the financial firms bearing the brunt of the attacks appear to have been spooked into radio silence.

Sustainable investing supporters like US SIF, Ceres, For the Long Term, and Americans for Financial Reform are communicating better than they did when the anti-ESG movement started, but its more about information-sharing than hashing out the details of an advertising, lobbying and social media strategy, said Bryan McGannon, US SIFs managing director.

Its less of a structured campaign apparatus, said McGannon, who wants to hone the investor voice on this issue in the future.

The reticence of Wall Street firms and their trade groups is understandable given the competing pressures from anti-ESG politicians urging them to scrap sustainable investment policies and environmentalists pushing them to go faster. But the silence is frustrating for those who cheered BlackRock Chair and CEO Larry Fink and others who once advocated for the green transition.

Case in point: BlackRock, along with the Bank Policy Institute and the Securities Industry and Financial Markets Association, declined to speak on the record for todays Long Game.

Of course, BlackRock is a company, not a political campaign, but the pro-ESG side looks at the success of state bankers groups in watering down some of the most extreme proposals in deep red states and wonder what could have been with Wall Streets help.

Ive had a lot of hard conversations with some big bank CEOs over this issue, said Rep. Sean Casten (D-Ill.), who co-chairs the Congressional Sustainable Investment Caucus. I think a lot of them are afraid of alienating the Republican Party.

Still, given that House Republicans anti-ESG legislation is likely to go nowhere, the lack of traction with voters reflected in polling and the silence on the issue in the first two GOP presidential debates, sustainable investment advocates are feeling pretty good.

The attacks have helped to create greater unity and consensus amongst treasurers and comptrollers around the country just in the same way that theyve helped to create more consensus amongst groups that have differing views on divestment and engagement, said David Wallack, executive director of pro-ESG nonprofit For The Long Term. Its not that everybody agrees on everything, but it has sharpened us.

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BOTTLED UP The mystery of the case of the missing bottle bill is becoming clearer.

Bipartisan support had been starting to grow around a national deposit on beverage containers to fund collection and recycling. Buoyed by industry momentum including from the Plastics Industry Association Sen. Jeff Merkley (D-Ore.) was expected to introduce a national bottle bill this past spring that would allow consumers to redeem their deposits while boosting recycling for bottles.

Were still waiting.

Environmental groups are split on whether retailers should be required to take back bottles and serve as redemption centers, which Heidi Sanborn, lead advocate and founder of the National Stewardship Action Council, opposes and said would be a no-go for retailers.

She also said industry groups and beverage brands have not yet agreed enough with any proposal to advocate for a Republican co-author, which she said is critical. And waste haulers continue to express concern that they would lose revenue under a national law.

Weve got to be a lot more flexible than I think some folks on all sides are willing to be, Sanborn said.

Merkley was looking for ways to strike that balance last week at an Environment and Public Works subcommittee hearing on the topic. A Merkley spokesperson said in a statement that he continues to have discussions with stakeholders about a framework for the legislation.

The beverage container recycling rate for the 10 states with bottle laws is about 60 percent, compared with about 24 percent in states without such laws, according to the Container Recycling Institute.

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Blue state governors are running to the White House for help stabilizing offshore wind plans. | Jordan Wolman/POLITICO

WIND WOES Six Democratic governors in Northeast states with big offshore wind dreams are making their pleas to the Biden administration public to do more to save the floundering industry.

Beset by high costs and supply chain snags, Democrats in New York, New Jersey, Maryland and other states have had to juggle their clean energy goals with energy companies demands for increased financial assistance and threats to walk away from projects unless they get help. Now, the governors are turning to the White House as President Joe Bidens offshore wind goals hang in the balance, Ry Rivard reports.

Absent intervention, these near-term projects are increasingly at risk of failing, governors from six states wrote in a letter to the president last month.

Their main request is that the Biden administration make it easier for companies to get more federal tax incentives under the Inflation Reduction Act, which can help offset much of a wind projects capital costs.

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GAME ON Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. Join us every Tuesday as we keep you in the loop on the world of sustainability.

Team Sustainability is editor Greg Mott and reporters Jordan Wolman and Allison Prang. Reach us all at [emailprotected], [emailprotected] and [emailprotected].

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ESG counteroffensive is missing big guns - POLITICO - POLITICO