In the Loop: Capitol quotes, mutant capitalism and the gender-nature nexus

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A day on Capitol Hill

Source: Getty

The Republican-led House finance committee met to discuss the SEC’s incoming climate disclosure rules yesterday.

Cynics might say that the stage was set for an entertaining but not particularly useful exchange of views – and yes, it did make for great television (which you can watch here).

At other times, the session veered dangerously close to becoming a sober and careful examination of the proposed rule, particularly with respect to Scope 3 emissions.

For those who don’t have time to tune in, we’ve picked out a few quotes that give a flavour of the debate.


Chair – Rep Bill Huizenga (Republican, Michigan)

“Congress created the SEC to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation – not to advance a progressive climate agenda… Whether the final climate rule is finalised next week or next month, I think we can conclude that [SEC chair Gary Gensler] has failed not only to convince his fellow commissioners, but the American people. And as we’ll hear today, he will likely not convince the court.”

Charles Crain, VP of domestic policy, National Association of Manufacturers
“We’re seeing exactly this [lack of robust cost-benefit analysis] with the climate rule – a failure to consider key aspects of the impact it will have on businesses, especially small and private businesses who are going to be pulled into this Scope 3 mandate. Those costs are not estimated or reflected in the rule at all.”

Lawrence Cunningham, special counsel, Mayer Brown
“It would impose millions of dollars of costs on companies, which will hurt investor value for no investor benefit, and probably no climate benefit… It would spur lawsuits over the adequacy of disclosure, which are costly even when baseless. All this would discourage companies of being public.”

Bill Schultz, vice-president, Schultz Fruitridge Farms
“Our industry’s focus is on growing the food, fuel and fibre this country needs, and being subjected to regulations intended for Wall Street does not advance that work… Every farm is unique, it’s like the colours of the rainbow. All farms are different shapes, colours and sizes, and you can’t throw them all into one bucket.”

George Georgiev, associate professor of law, Emory University School of Law
“The proposed SEC requirement on GHG emissions (Scope 1, 2 and 3) is intended to give investors an understanding of the issuer’s transition risk, and this is a well-established and uncontested source of business risk regardless of what the SEC does.”

Rep Pete Sessions (Republican, Texas)
“The SEC takes important data, information that was shared for accuracy, and then comes back if someone got something wrong, and fines them. It’s a weapon, sir. And this is why these darn Republicans today are saying there’s so much that’s unknown, so much that can’t be connected, and yet you have to put it into a filing.”

Rep Warren Davidson (Republican, Ohio)
“This has been the most aggressive rule-making since Dodd Frank.”

Rep Steven Horsford (Democrat, Nevada)
“Here we go again. Republicans are so focused on their outrageous culture wars that they’re not going to spend our time today talking about the issues that are imperative to the financial sector. Instead, we have convened so my colleagues can continue to bash what is really a customer-driven initiative.”

Rep Sean Casten (Democrat, Illinois)
“This is not a question about whether or not there are costs associated with climate disclosures, because of course there are costs. This is a question about whether it is the responsibility of companies to provide information to investors under our accounting rules, or is it the obligation of investors to spend their money to go and discover what risks public companies are exposed to.”

Mutant woke capitalism

Responsible Investor this week covered the assignment of target companies to participants in the Nature Action 100 initiative. The piece focused on the 190 original investors, but a more recent joiner caught our eye.

UK hedge fund Marshall Wace – one of Europe’s largest – has signed up to the collaborative engagement on biodiversity, and is also a long-time active member of Climate Action 100+, having signed up in 2021.

These memberships seem slightly surprising, given the professed views of CIO and chair Paul Marshall. In a speech at the Alliance for Responsible Citizenship conference in November, he blasted “the three mutant capitalisms” – monopoly, crony and woke, apparently.

According to Marshall, woke capitalism is the “the imposition of a top-down ideology onto the free market system by politically motivated bureaucrats” whose ideology is “framed through ESG” with a “garnish of DE&I”.

While the intent behind ESG may be good, he continued, the result has been “a set of standard, standardised, ideologically based taxonomies which have very little to do with good governance”.

Again, this seems odd from the co-founder of a firm that established an ESG hedge fund in 2020. We wonder what Marshall Wace’s head of sustainable investing and stewardship, who reports directly to the chair, makes of it all.

Quote of the week

“Perhaps with the bloom off the ESG rose, it is time to acknowledge that most asset managers ignore systemic risk”

Professor Ken Pucker of Tufts University responding on LinkedIn to BlackRock’s “ESG about-face”, as evidenced by the slump in support for E and S resolutions

The week in RI

Nature was top of the agenda this week. The TNFD unveiled its list of “early adopters” at Davos, including big financial names such as NBIM, Federated Hermes and Bank of America.

Meanwhile RI revealed that Nature Action 100 had finalised its engagement teams and followed up with the results of our survey of the investors involved, which provided details of the names, sectors and locations of their target companies.

Proxy voting was another key topic. We reported on the big asset owners co-filing on a climate proposal at Shell, and also on the decision by NGO Follow This to leave BP off its target list this year.

We also flagged a recommendation by the IIGCC – included in new guidance on setting net-zero policies – that asset owners should conduct an annual review of their managers after proxy season to assess the alignment of their voting activities with owner expectations.

In other news, BlackRock flagged ESG scrutiny as a financial risk factor in its quarterly results for the first time, PCAF announced plans to look at carbon intensity metrics and transition finance in 2024, and a flash note seen by RI showed EU institutions edging towards agreement on ESG ratings regulation.

Finally, this week saw the conclusion of our Scope 3 series, with deep dives on assurance and regulation

Santander’s AM ‘transformation’

ShareAction’s recent Voting Matters report laid bare the dramatic, if unsurprising, collapse in support for ESG proposals among some of the big US managers – a situation unlikely to change anytime soon.

But for those despairing, the UK campaign group’s annual study also found examples that sudden and substantial reversals can go the other way too.

Take the example of Santander Asset Management. Ranked 67th out of 68 in the 2022 version after backing a paltry 4 percent of environmental and social proposals, the Spanish investor shot up to 18th place for 2023, supporting a hefty 92 percent of resolutions assessed.

Asked about this startling turnaround, Santander AM told RI that the firm has “undergone a transformation project to integrate SRI [Socially Responsible Investment] in our investments”.

An updated voting policy with an expanded scope has seen the €207 billion manager “actively” vote in “substantially more meetings” than in 2022, the spokesperson explained.

In the 2021 version of its report, ShareAction found that Santander AM did not vote on 99 percent of proposals assessed at companies where it had shareholdings.

The manager’s metamorphosis did not stop at voting.

RI was also told that assets managed in products classed as Article 8 and 9 under the EU’s anti-greenwashing law SFDR – and therefore making claims around ESG or sustainability – more than quadrupled last year. At end-2023, the figure stood at €48 billion, versus €10 billion a year earlier.

The gender-nature nexus

The news that Azerbaijan had appointed 28 men to the COP29 committee and no women sparked understandable outrage.

Although the exclusion of women from key climate discussions and climate strategies has been repeatedly criticised, it has become a somewhat depressing habit.

UNEP FI is apparently keen to ensure that the same shouldn’t happen with nature.

The day after the TNFD announced its “early adopters” at Davos, the UN body put out a statement on gender and nature.

Arguing that the “gender component in nature-risk management is often overlooked”, the article set out a “four-pillar structure mirroring the TNFD to incorporate gender-responsive strategies in nature-risk management”.

Clearly, UNEP FI’s intentions are admirable. Yet, at a time when investors and corporates are still struggling with the basics of nature risk, it does seem quite a big ask to expect them to add gender into the mix.

As one of our editorial team put it, why try to solve one intractable problem when you could try to solve two?

As always, your thoughts on this or anything else in today’s letter are very welcome. Email us at

Today’s letter was prepared by the RI editorial team.