All eyes on Patrick McHenry

Jan 27, 2023 View in browser   By Debra Kahn THE WEEK THAT WAS ESG watchers are parsing Rep. Patrick McHenry's every utterance. | Francis Chung/POLITICO GUIDE TO THE ANTI-ESG GALAXY — Gas stoves got you down? Wishing you could vote the shares of your passively managed fund? Congressional Republicans have your back with a flurry of bills aimed at countering perceived regulatory overreach in sustainable investing. Eleanor Muller and Zach Warmbrodt have a handy primer on the GOP's political backlash. Among the bills being introduced and contemplated: — Reps. Andy Barr (R-Ky.) and Rick Allen's (R-Ga.) Ensuring Sound Guidance Act, which would require investment advisers and ERISA retirement plan sponsors to prioritize profits over ESG factors. — Reps. Blaine Luetkemeyer (R-Mo.) and Bill Huizenga's (R-Mich.) Investor Democracy is Expected Act would require passively managed funds, like index funds, to let investors — rather than advisers — vote shares. — Rep. Bryan Steil's (R-Wis.) Putting Investors First Act would boost SEC oversight of proxy advisory firms like Glass Lewis and Institutional Shareholder Services. — Sen. Mike Rounds' (R-S.D.) Mandatory Materiality Requirement Act would put limits on the SEC's ability to issue new disclosure requirements for public companies. FORT MCHENRY — All these bills will have to get through the House Financial Services Committee, where incoming chair Rep. Patrick McHenry (R-N.C.), is facing a restive group of GOP members agitating to take on ESG, as Emma Dumain and Adam Aton report for POLITICO's E&E News. "We've got a blank slate," said Rep. Ralph Norman (R-S.C.), one of several committee members who won concessions from House Speaker Kevin McCarthy (R-Calif.) in his messy leadership fight earlier this month. "So we're gonna look at ESG." McHenry has sounded a moderate note, saying last month that he supported aspects of ESG that can have "significant bearing on economic outcomes," such as corporate governance. He also said "some legislation being kicked around is misguided" and "plays politics with corporations, in the name of having corporations not play politics." He said in a statement that the panel would focus on both "activist regulators and market participants who have an outsized impact" and singled out the SEC's climate disclosure rule as an area of focus. On the rest, he said, "we'll lay that out in the coming months." McHenry-watchers on all sides are hopeful. Myron Ebell, director of the Competitive Enterprise Institute's Center for Energy and Environment, called McHenry "a really good, free-market conservative" and "a very intelligent guy" who "might become somewhat more negative on ESG" as he learns more about the issue. Committee member Rep. Sean Casten (D-Ill.), who launched a "Sustainable Investment Caucus" this week, drew an optimistic comparison between McHenry and former House Speaker Nancy Pelosi (D-Calif.). "She liked to talk about managing the exuberances in our caucus," he said. "And I was glad to see Mr. McHenry sort of tamp down some of the exuberances of his."   JOIN POLITICO ON 2/9 TO HEAR FROM AMERICA'S GOVERNORS: In a divided Congress, more legislative and policy enforcement will shift to the states, meaning governors will take a leading role in setting the agenda for the nation. Join POLITICO on Thursday, Feb. 9 at World Wide Technology's D.C. Innovation Center for The Fifty: America's Governors, where we will examine where innovations are taking shape and new regulatory red lines, the future of reproductive health, and how climate change is being addressed across a series of one-on-one interviews. REGISTER HERE.     SUPPLY CHAINS ALSO IN CONGRESS — A bill by Sen. Joe Manchin (D-W.Va.) challenging the Treasury Department's implementation of his own Inflation Reduction Act language for electric vehicle incentives. As Tanya Snyder reports, Manchin is upset that Treasury is planning to start handing out tax credits without following the IRA's materials-sourcing requirements, which restrict EV tax credits based on whether their batteries are domestically sourced. His bill would cancel the tax credits for vehicles that don't meet the sourcing rules. But it's not clear how much support he has, and Treasury says it's planning to release its sourcing guidelines in March, anyway. He's also giving Senate Minority Leader Mitch McConnell (R-Ky.) ammunition to argue, "this is what happens when Democrats make it up as they go along and clumsily try to rewrite, rewire, huge parts of our economy on the fly." CRITICAL MINERALS HURDLE — Another complicating factor: The signal sent by the Biden administration's removal Thursday of more than 225,000 acres in northeastern Minnesota from mining and geothermal leasing for 20 years over water quality concerns, dismaying advocates of a proposed copper mine there. Hannah Northey and Heather Richards of POLITICO's E&E News have the whole saga here. Twin Metals' response, via Heather: "This region sits on top of one of the world's largest deposits of critical minerals that are vital in meeting our nation's goals to transition to a clean energy future, to create American jobs, to strengthen our national security and to bolster domestic supply chains." AROUND THE NATION ONE RAT'S TRASH — New York City Mayor Eric Adams is high on curbside composting — not for its environmental bona fides, but for its rat-discouraging potential. Elected leaders name a number of reasons for Adams' $45 million budget line for new trucks, including the role composting plays in removing a significant chunk of material from ending up in landfills and incinerators. But it's the scourge of city rats that has compelled many city officials to act in recent months and helped drive demand among residents, Danielle Muoio Dunn reports. "Most people don't know this about me, but I hate rats," Adams said in a speech announcing the new plan. "And pretty soon, those rats will be hating me." In August, Boston introduced its curbside pilot program with plans to expand it after three years. City leaders said it's crucial to meet their "Zero Waste" goal of diverting 80 percent of trash from landfills by 2035. But when it comes to getting people on board, rats are the big sell. "You can talk to them about greenhouse gas emissions and all these different reasons, but those all feel abstract," said Theresa Savarese, Boston's director of city waste. "But when you talk about the rats and roaches, people's eyes light up." Movers and Shakers CARBON CLUB — Giana Amador, co-founder of D.C.-based carbon-removal nonprofit Carbon180, is leaving to "start a new venture in carbon removal." (H/t Marcia Brown) YOU TELL US  GAME ON — Happy Friday! Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability. Team Sustainability is editor Greg Mott, deputy editor Debra Kahn, and reporters Jordan Wolman and Allison Prang. Reach us at gmott@politico.com, dkahn@politico.com, jwolman@politico.com and aprang@politico.com. Want more? You can have it. Sign up for the Long Game. Four days a week and still free. That's sustainability! WHAT WE'RE CLICKING — Is the Interior Department going to have the political will to cut water supplies from the Colorado River? — Colorado is looking to AI to help detect wildfires. — ArcelorMittal is putting $120 million into a "green steel" plant near Boston.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Jordan Wolman @jordanwolman Allison Prang @AllisonPrang   Follow us

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