ESG counteroffensive is missing big guns

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Oct 03, 2023 View in browser   By Jordan Wolman Presented by THE BIG IDEA 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 nobody's 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. We’ve 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 what’s 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 it’s more about information-sharing than hashing out the details of an advertising, lobbying and social media strategy, said Bryan McGannon, US SIF’s managing director. “It’s 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 today's 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 Street’s help. “I’ve 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 they've 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. “It's not that everybody agrees on everything, but it has sharpened us.”   A message from PepsiCo: Food for Good: Join the journey to zero hunger   WASHINGTON WATCH 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. We're 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. “We've 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.   A message from PepsiCo:   AROUND THE NATION 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 Biden’s 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 project’s capital costs.   A message from PepsiCo: To advance food security and help make nutritious food accessible to all, PepsiCo has partnered with more than 60 nonprofits across 28 countries to implement solutions that meet the unique challenges of each community. Learn how we are catalyzing sustainable change in local communities.   YOU TELL US 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 gmott@politico.com, jwolman@politico.com and aprang@politico.com. Sign up for the Long Game. It's free!   DOWNLOAD THE POLITICO APP: Stay in the know with the POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need. DOWNLOAD FOR iOS – DOWNLOAD FOR ANDROID.     WHAT WE'RE CLICKING — The Financial Times takes a look at scrutiny around "the gap between the perception of what ESG ratings assess and what they actually demonstrate." — Now this seems unsustainable: The company that set out to become the "Tesla of trucks" is losing $33,000 on every pickup it sells, the Wall Street Journal reports. — What would happen if we did actually "end fossil fuels now"? The Washington Post's "climate zeitgeist reporter" offers a thought experiment.   Enter the “room where it happens”, where global power players shape policy and politics, with Power Play. POLITICO’s brand-new podcast will host conversations with the leaders and power players shaping the biggest ideas and driving the global conversations, moderated by award-winning journalist Anne McElvoy. Sign up today to be notified of the first episodes in September – click here.       Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Jordan Wolman @jordanwolman Allison Prang @AllisonPrang   Follow us

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