Environmental Investors Accused in Congress of Hurting US Economy

WASHINGTON — Debate over the devastation of climate change was back in Congress Wednesday, this time about when responsible environmental investing adversely affects the finances of businesses accused of polluting.

A House Judiciary subcommittee held a hearing on how environmental activists use their political power to pressure corporations to reduce their emissions in a way that can hurt their earnings.

Republicans said the result can be damage to the economy, job losses and higher prices for consumers.

Rep. Mary Scanlon, D-Pa., said factoring climate change into investment decisions was “necessary.” 

One example they mentioned in a new report is the multibillion-dollar oil industry. Some environmental activists have been demanding that investment fund managers cease putting money into their stocks.

Another example is the agriculture industry, which is trying to withstand pressure from environmentalists to reduce use of pesticides and to convince consumers to eat less beef.

The activists are viewed by some as encroaching on “the very interests that allow Americans to drive, fly and eat,” said Rep. Thomas Massie, R-Ky., chairman of the Subcommittee on the Administrative State, Regulatory Reform and Antitrust.

Massie accused groups like Climate Action 100+ of being “left-wing activists” and a “climate cartel.” Their “collusion” is the same as an antitrust violation, Massie and other Republicans said.

Climate Action 100+ is an investor-led initiative that seeks to balance good environmental policy with the need of corporations to make profits.

It uses the leverage from environmentally minded investors to compel large corporate greenhouse gas emitters to revise their business plans to reduce climate change while continuing to maximize the long-term value of their assets.

One of its most controversial moves was in 2021, when it convinced major ExxonMobil investors to vote for new members of the board of directors with reputations as environmentalists. ExxonMobil is one of the world’s largest oil companies and an occasional target of complaints about the greenhouse gases its fuels produce.

One of the biggest investors that joined Climate Action 100+ in calling for new ExxonMobil directors was the California Public Employees’ Retirement System.

“This is not collusion, it’s collaboration,” Dan Bienvenue, investment manager of CalPERS, told the House subcommittee Wednesday. CalPERS manages about $500 billion in assets.

He said CalPERS was not trying to hurt the finances of corporations but to get them to invest responsibly.

“We view climate change as an investment opportunity in order to maximize returns,” Bienvenue said. He mentioned new business opportunities with alternative energy sources as an example.

When asked whether CalPERS and other environmental investors are compelling oil companies to cut the production that creates their revenue, Bienvenue did not give a simple yes or no reply.

“Climate change is something that is happening,” Bienvenue said repeatedly.

Minnesota Attorney General Keith Ellison said he could find no collusion or antitrust violations in the political pressure environmentalists exert on corporations. They are merely exercising their First Amendment rights to freedom of expression, he said.

“It’s the floods, it’s the wildfires, it’s the drought” that affect their investment policies, Ellison said.

Democrats on the subcommittee largely agreed with him.

“Climate change is starting to impact nearly every major sector of our economy,” said Scanlon. “It’s not just reasonable, it’s necessary that people have to consider climate change when making these investment decisions.”

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