The Politicization of ESG

The discussion examines ESG’s politicization, focusing on recent House bills consolidating 19 proposals into four, targeting materiality, shareholder proposals, and proxy voting while questioning SEC authority. ESG is framed as an ideological battleground ahead of the 2024 elections. Concerns over materiality and proxy advisory firms highlight bipartisan issues, though broader political divides persist. The SEC’s Scope 3 emissions rule faces legal challenges under the Major Questions Doctrine, emphasizing the tension between transparency, investor needs, and regulatory authority. While sustainability is preferred over ESG terminology, substantive climate policies like carbon pricing would be more effective in reducing emissions.