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House Republicans move to silence Wall Street in climate fight – POLITICO
Finance & Tax
While framing criticism of ESG as holding Wall Street to account, House Republicans appear to be picking spots where they’ll minimize friction with the financial services industry.
“I've had a personal conversation with Larry Fink at BlackRock about this. I've had a conversation with the CEO of Vanguard about this,” Rep. Andy Barr, a leader in the House Financial Service Committee’s upcoming “ESG month,” said of the two giant money managers. | Francis Chung/POLITICO
By Zachary Warmbrodt and Eleanor Mueller
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The fraying relationship between big business and GOP politicians is about to get more strained.
Republicans who lead the House Financial Services Committee plan to spend the next few weeks holding hearings and voting on bills designed to send a clear signal: Corporations, in particular big investment managers, should think twice about integrating climate and social goals into their business plans. Committee conservatives will target the process in which advocates pressure public companies to adopt environmental, social and governance (ESG) goals using the shareholder voting process.
“I’ve had a personal conversation with Larry Fink at BlackRock about this. I’ve had a conversation with the CEO of Vanguard about this,” Rep. Andy Barr (R-Ky.), a leader in the committee’s upcoming “ESG month,” said of the two giant money managers. “Our objective is not to fight for the CEOs of these companies. Our objective is to defend retail investors in America.”
It’s a delicate dance for both sides. While the committee’s bills have no chance of becoming law under President Joe Biden, the messaging — and industry’s response to it — will feed into a broader political conflict that could set the table for the next time Republicans control Washington.
House GOP leaders are under pressure to score points in the right’s escalating war on what many Republicans call “woke” capitalism — even though a number of senior GOP lawmakers would rather tell government regulators, instead of executives, what to do. While framed around holding Wall Street to account, Financial Services Committee Republicans appear to be picking spots where they’ll minimize friction with the industry’s biggest players.
Lobbyists for their part want to avoid further inflaming tensions. Their companies are poised to be huge targets for Florida Gov. Ron DeSantis and other Republican White House contenders who argue that corporations are exercising ideological agendas. Big money managers and banks already face a barrage of legislative attacks from state Republican officials over their policies on energy and guns. BlackRock’s Fink, the financial industry’s most prominent leader in the sustainable investing trend, said last month he will no longer use the term ESG because “it’s been misused by the far left and the far right.”
House Democrats, in a twist, are rallying behind the ability of Wall Street and investors to choose how they want to tackle societal issues such as climate change.
“We’ll continue to be the voice that’s defending the fact that the market should have choice,” Rep. Sean Casten (D-Ill.) said in an interview.
While the right’s culture war has ensnared a range of major brands, such as Disney and Bud Light, the Financial Services Committee will take a more targeted approach. It’s aiming at firms that play big roles in ESG investing, a strategy for managing businesses and retirement funds that elevates concerns about climate change and diversity.
Finance industry proponents argue that addressing issues like climate risk is critical for long-term investing and that there’s consumer demand for it as well.
Fink, who has urged business leaders to focus on the environment, said at the New York Times DealBook Summit in November: “Stakeholder capitalism is not woke — it’s not political, it’s capitalism.”
Bryan McGannon, managing director of US SIF, a sustainable investing advocacy group that includes investment management firms, mutual fund companies and banks, calls it “free-market solutions.”
“Investors are demanding it,” McGannon said. “But also the financial industry is realizing, `Wait a second, here is a whole other set of data giving us information about how companies are run.’”
Republican critics — who on this point have backing from other sectors such as oil and gas — warn that it’s an outgrowth of left-leaning political pressure that threatens investor returns and the growth of the U.S. energy industry.
Adam Brandon, president of the conservative FreedomWorks, said ESG is “another avenue for state control of the economy and of society.” He said the Republican House majority “was elected by the people to reverse this course of action.”
While a number of Republicans clearly believe it’s a winning attack line, the House Financial Services Committee — a panel where Wall Street’s priorities often win the day — appears to be carefully choosing which fights to take on with industry.
“ESG is maybe a symptom of the larger concern of ‘woke’ capitalism,” Rep. Bill Huizenga (R-Mich.), who leads committee Republicans’ ESG working group, said in an interview. “This is part of the reason why [House Financial Services Chair Patrick McHenry] asked me to take this on. Let’s narrow the scope. … Because if we go fight this multifront war — we’re going to lose.”
A report that Huizenga’s working group released to set the stage for this month’s committee work prioritizes concerns about so-called proxy advisory firms that provide recommendations to big investors on how they should vote on shareholder matters that dictate the direction of public companies.
Two proxy advisory firms — Glass Lewis and Institutional Shareholder Services — dominate the space and have long been targeted by business groups such as the U.S. Chamber of Commerce, which argue that they should be subject to greater regulatory scrutiny because of their influence over the operations of companies. Investors who rely on proxy advisory firms say they provide helpful guidance on issues like executive pay, board nominees and climate proposals pushed by shareholders.
In contrast, asset managers like BlackRock, Vanguard and State Street — recurring targets for Republicans given their behemoth status and stances on ESG — get less scrutiny than expected in the GOP report. They’re called out as the “Big Three” but are identified by name only in a footnote. They aren’t expected to be the headliners of dedicated hearings at House Financial Services, unlike the two proxy advisory firms and regulators.
Republicans on a separate committee, House Judiciary, took a more aggressive tack toward the Wall Street giants Thursday, with letters that pressed BlackRock, Vanguard and State Street for information about their work as part of an international industry coalition committed to reducing greenhouse gas emissions. Vanguard left the group last year.
State Street spokesperson Ed Patterson said Friday that the fund manager assesses and votes on shareholder proposals “based on what we believe is in the best long-term interests of our clients and their investments.”
“Our actions and decision-making are guided by research, expert analysis and our fiduciary duty to clients,” he said.
Amid the mounting pressure, the big asset managers have responded by rolling out ways for their customers to vote more directly in shareholder matters.
“As an investor-owned asset manager, Vanguard’s interests are squarely aligned with empowering everyday investors to reach their long-term financial goals,” Vanguard spokesperson Netanel Spero said. “We remain singularly focused on maximizing our clients’ returns and giving them the best chance for investment success.”
For now, bank lobbyists are also relieved that lenders appear to be getting a pass in the Financial Services Committee’s “ESG month,” despite a desire by some Republicans to pressure banks to serve fossil fuel companies and gun manufacturers.
“We’ve got some members who are like, ‘Hey, you didn’t name so and so’ … and it’s like, OK, preliminary report,” Huizenga said. “The system is moving forward. We’re not done with this. And when it’s appropriate to name names, we’ll name names. When it is appropriate to go after a wider swath of issues, we’ll do that. But let’s chalk up a couple of wins here. This is chess. You don’t declare checkmate on the first move.”
He added that the ESG working group plans to release “a more robust, longer report.”
If the committee’s report and tentative hearing schedule are any indication, business groups like the Chamber of Commerce may feel little need to speak out on the endeavor. They may even see Republicans advance some of their lobbying priorities.
The American Petroleum Institute, for example, backs a bill by Barr that would require investment advisers and retirement plan sponsors to prioritize financial returns over ESG factors.
The Chamber, though it has been on the outs with Republicans in recent years, has a shared desire to rein in the proxy advisory firms and regulators such as the Securities and Exchange Commission. The Chamber sued the SEC last year after it reversed Trump-era restrictions on the proxy advisory firms, whose recommendations sometimes clash with corporate management over how companies should be run.
Tom Quaadman, executive vice president of the Chamber’s Center for Capital Markets Competitiveness, said the group “appreciates the efforts of the House Financial Services Committee to better understand the nature of ESG and its impacts across the U.S. marketplace and globally.”
“American markets should preserve the ability of individual investors to invest their own money based on whatever criteria they think appropriate, including their values and priorities,” Quaadman said. “Businesses also need the same freedom to, in conjunction with their shareholders, make decisions that they deem best for their own operations. The marketplace, not government, should be the one determining if investors and businesses have made good or bad decisions.”
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Fight, shooting at Rocky Mount motorcycle club leaves 1 man dead – WTVD-TV
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ABC11 24/7 Streaming Channel
ROCKY MOUNT, N.C. (WTVD) — A man was shot and killed during an altercation at a motorcycle club, Rocky Mount Police said Monday.
Officers responded just after 9:30 p.m. on Sunday to All Round Huzlerz at 309 Tarboro St. Shots were fired during the fight and 55-year-old Donald Joseph of Rocky Mount was struck. He died at the scene from his injuries.
Police said Joseph was shot by "a known individual" but did not release a name nor mention anyone in custody.
No other injuries were reported.
The Rocky Mount Police Department Criminal Investigations Division continues to investigate. Anyone with information on this incident is asked to call the Rocky Mount Police Department at (252) 972-1411, call Crimestoppers at (252) 977-1111 for cash rewards, or Text-A-Tip (text RMPOL and your message to 274637).
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Tiger women ready for ACC Challenge – Rivals.com – Missouri
Mizzou women’s basketball is halfway through its non-conference schedule and sits at 5-2 before its matchup with Virginia. The Tigers will take on the Cavaliers in Charlottesville Thursday afternoon at 4:00 in the ACC/SEC Challenge. Virginia enters the matchup with a 4-2 record and has losses to #25 Oklahoma and #7 LSU.
Mizzou is coming off a loss in the Daytona Beach Classic to Kent State and looks to gain its first road win of the season. The Tigers’ first road game resulted in a loss earlier this season to SLU.
“Disappointed in our trip to Florida, it just didn’t feel like our offense,” head coach Robin Pingeton said. “We’ve got four players averaging double figures, but our offense didn’t travel with us. You’ve got to be really strong on the defensive end, especially on the road. I thought our transition defense has definitely made some strides, really pleased where that is, I like where that’s trending”.
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Heading into this game Mizzou is averaging 80.6 points per game and is being led by Hayley Frank with 17.9 points per game. To this point in the season Mizzou is shooting 47% as a team from the field and 39% from behind the arc. Defensively the Tigers are allowing just 68.1 points per game.
Pingeton spoke highly of the Cavaliers ahead of the matchup on Thursday: “Virginia is really talented. They’ve got good size, good athleticism, and a good balance in their inside-out game”.
Virginia currently averages 17 offensive rebounds a game and is limiting opponents to scoring 61.5 points per game. Pingeton believes the way the Tigers have to fight this is with more grit on the defensive end and by taking these matchups personally.
“I think we take a lot of pride in our offense, and we’ve got to get to that point where defensively we’re really taking it personal,” she said. “We have to be finding ways to be gritty in our rotations and putting out fires for each other and it comes down to not the size of the dog in the fight but the size of the fight the dog. We’ve got to have a mind shift, our mentality is just got to be a little bit grittier on that defensive end”.
Mizzou must get better every week as the season goes on, Pingeton believes. The Tigers expect this game to be a battle, but they will not do anything different than what they are capable of according to Pingeton.
“It’s just continuing to do what we do and improve in the areas that we need to improve on. It’s these days in practice that lead up to Virginia, that we’ve created better habits and awareness and a sense of urgency. In regards to our rotations, be more disruptive. To our attention to detail, getting a body and making sure we’re getting somebody boxed out. Low man always wins on the boards. It’s some of those kinds of things that we have to continue to be mindful of in practice”.
Thursday’s game will be televised by the ACC Network.
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Morning news brief – KUCB
A MARTÍNEZ, HOST:
Secretary of State Antony Blinken is making his third trip to the Middle East since Hamas attacked Israel on October 7. His trip began at NATO headquarters in Brussels, where Blinken said diplomatic work by the U.S. is responsible for the current pause in the fighting in Gaza.
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ANTONY BLINKEN: We’ll be focused on making – doing what we can to extend the pause so that we can continue to get more hostages out and more humanitarian assistance in.
MARTÍNEZ: NPR’s Michele Kelemen is traveling with the secretary. She joins us now. Michele, so what is he hoping to accomplish on this latest trip to the Middle East?
MICHELE KELEMEN, BYLINE: Yeah, so he’s going to Israel and the occupied West Bank, where he’ll meet with Palestinian officials. And he has a few goals, A. The U.S. wants to expand the hostage deal that has seen some, but not all, of the hostages freed by Hamas in exchange for Palestinian prisoners released in Israel and a pause in the fighting. The U.S. wants to see all those hostages out and for the pause to be extended. Blinken also wants to ramp up international aid to Gaza and make sure Israel does much more to protect Palestinian civilians in the next phase of its operation against Hamas. You know, thousands of Palestinian civilians have been killed so far in Gaza. And then he also wants to start talking about the day after.
MARTÍNEZ: So what is the U.S. saying about what happens to Gaza when the fighting stops?
KELEMEN: So Blinken has set out kind of a few broad markers. The U.S. doesn’t want Israel to reoccupy Gaza, and it doesn’t want Palestinians permanently displaced. He talks about the day after and the day after that. The only way to resolve this is to have a Palestinian state with Gaza as part of that. But there are a lot of doubts about how the Palestinian Authority, which is based in the West Bank, can reestablish itself in Gaza. Those are the kinds of things that he wants everyone in the region to start talking about. He also wants to make sure that the conflict doesn’t engulf the whole region. Blinken is going to see some Arab foreign ministers when he goes to the climate conference in Dubai at the end of the week, and that will be part of that discussion.
MARTÍNEZ: Now, Blinken was at NATO headquarters today, or is at NATO headquarters today, to talk about Russia’s war in Ukraine. So what are NATO allies saying about the state of that war?
KELEMEN: Well, NATO Secretary General Jens Stoltenberg says that Ukraine has had some big wins in the past year and that Russia has, in his words, fallen backward. He says Russia is weaker, but he says Russia should not be underestimated. It continues to launch drones and missiles at Ukraine’s energy infrastructure ahead of what could be another really tough winter. So he says Ukraine needs continued support from all of the allies, and that was the big focus of the meetings here today. They also talked about Ukraine’s pathway to NATO membership, and they held a first high-level meeting of the so-called NATO-Ukraine Council.
MARTÍNEZ: Now he has one more high-level meeting on his schedule ahead of a stop in Israel. Tell us about that.
KELEMEN: Yeah, he’s going to North Macedonia, which is hosting a meeting of the Organization for Security and Co-operation in Europe. That’s a 57-nation group that has historically played an important role in human rights in the countries of Europe and the former Soviet Union. Russia’s foreign minister is expected to be there, so Ukraine and the Baltic states are boycotting. But Blinken decided to go ahead with the visit, though he’s not expected to have any one-on-one encounters with his Russian counterpart, Sergey Lavrov.
MARTÍNEZ: That’s NPR’s Michele Kelemen, traveling with Secretary of State Antony Blinken. Michele, thanks.
KELEMEN: Thank you.
(SOUNDBITE OF MUSIC)
LEILA FADEL, HOST:
As Blinken heads to the Middle East, President Biden focuses on his domestic agenda today.
MARTÍNEZ: Yeah. He’s traveling to Pueblo, Colo., to tout his administration’s investment in clean energy jobs and is expected to take some swipes at right-wing Republicans.
FADEL: NPR White House correspondent Deepa Shivaram is in Colorado with Biden. Hey, Deepa.
DEEPA SHIVARAM, BYLINE: Hey, Leila.
FADEL: So why Pueblo? What’s going on there?
SHIVARAM: Yeah. Well, there’s a couple reasons. First, he’s going to visit a plant owned by the largest wind turbine tower manufacturer in the world. The South Korean-based company is called CS Wind, and they say that thanks to Biden’s major climate and jobs bill, they’re adding hundreds of jobs in the state in the next few years. And secondly, Pueblo is in Colorado’s 3rd Congressional District, which is represented by right-wing Republican Lauren Boebert. She’s one of former Trump’s biggest supporters and has been a prominent critic of President Biden, particularly on this climate and jobs bill, which she says should be repealed. So that’s why Biden is in Pueblo today – to prop up his big legislative wins and to, as you said earlier, take a swipe at right-wing Republicans he’s been so critical of. Biden is expected to talk about how he thinks Boebert and Republicans like her are a threat to the progress that he says his administration has made.
FADEL: Now, we’ve heard Biden criticize right-wing lawmakers. He calls them MAGA Republicans repeatedly. But he doesn’t often go after individual members like this in their own district. What’s the thinking here?
SHIVARAM: And this is an interesting move. I talked to Adam Green, who leads the Progressive Change Campaign Committee. It’s a left-leaning political advocacy organization. He’s been meeting with the White House and White House officials lately to talk about the president’s economic messaging. And he says one of the things Democrats need to do more of is lean into the fight on issues with extreme Republicans, whether it’s about health care or jobs or the economy.
ADAM GREEN: In order for the public to understand the difference between Democrats and Republicans on things like jobs or lower-priced prescription drugs, we need to see a fight.
SHIVARAM: And Green says that, generally speaking here, people love drama. It gets more attention. And he says for Biden to go to Congresswoman Boebert’s district and pick a fight with her specifically is a good strategy because of how loudly critical she is of Biden.
GREEN: So this particular trip, in particular, might be outsized in its influence and is a good down payment on a larger strategy of picking smart fights with Republicans.
SHIVARAM: This idea that we’ve been talking about of drawing contrasts with Republicans is something that we’ve heard the White House try to do when it comes to selling Biden’s economic agenda, but this is definitely a more pointed way of going about it. And you have to keep in mind, Leila, this comes at a time when recent polls have shown that the public still doesn’t approve of how Biden has been handling the economy. So 11 months out from the election, it’ll be interesting to see how this larger strategy here of picking smart fights, as Adam Green says, could impact public opinion, especially because this district has a really tight race. In 2022, it was super close. So it’s a potential place for Democrats to flip the seat blue next year.
FADEL: Now, this trip was supposed to happen last month but got postponed because of the crisis in the Middle East. Does this mean Biden is turning his attention back to domestic issues now?
SHIVARAM: Yeah, that’s right. The president was supposed to make this trip out in about mid-October but canceled at the last minute. But the White House says the president’s been working across, quote, “a range of issues.” In addition to this Colorado trip, he’s traveling more domestically in the coming weeks. They just announced two upcoming trips to Philadelphia and the Boston area.
I will note, though, that during this trip in Colorado, you know, the conflict in the Middle East is still top of mind. There are still protesters that are calling for an end to U.S. aid to Israel that the president’s motorcade has passed by. Of course, we’ve seen some folks who are also supportive of the president as well. And as Michele Kelemen just noted, the U.S. secretary of state, Antony Blinken, heads to the Middle East today, which is the last day of the extended cease-fire between Israel and Hamas.
FADEL: NPR White House correspondent Deepa Shivaram, thanks so much.
SHIVARAM: Thank you.
(SOUNDBITE OF MUSIC)
MARTÍNEZ: Annual climate negotiations kick off tomorrow in the United Arab Emirates.
FADEL: Countries are currently not on track to meet the agreed-upon limit of 1.5 degrees Celsius or 2.7 degrees Fahrenheit of warming. What does that mean, and what would the U.S. look like if warming goes beyond that benchmark?
MARTÍNEZ: Lauren Sommer from NPR’s climate desk is here to tell us. Lauren, so if the world goes past 1.5 degrees to 2 or 2.5 degrees Celsius, that difference might seem small on paper, and it sounds small when I just said it, but what would it actually look like on the ground?
LAUREN SOMMER, BYLINE: Right, yeah. I mean, half a degree kind of seems minor, but it makes a massive difference in terms of extreme weather in the U.S. and, you know, as a result, the cost to lives and property – because, you know, that number – 1.5 Celsius, which is 2.7 Fahrenheit – it’s an average. It takes into account all the temperatures across the planet all year. But warming doesn’t happen evenly, and the U.S. is actually heating up faster than that.
MARTÍNEZ: So does that mean if the planet goes beyond 1.5 degrees of warming, the U.S. would get hotter than that?
SOMMER: Yeah, exactly. So say the world reaches 3 degrees Celsius, which is 5.5 Fahrenheit. Parts of the U.S., like Alaska and northern states, would heat up much more – twice as much in some cases. And when it’s hotter, that affects the severity of the weather, like extreme storms.
MARTÍNEZ: Yeah. And the U.S. has seen some very destructive hurricanes in recent years. Would that trend keep getting worse?
SOMMER: Yeah, hurricanes, tropical storms are getting more intense. But, you know, so are storms in general because a hotter atmosphere, it can hold more water vapor. I talked to Deanna Hence, an assistant professor at the University of Illinois Urbana-Champaign, and she says that means clouds can drop more rain.
DEANNA HENCE: Every time we have a heavy rainfall event, it’s more likely to be even heavier than what we’re typically used to seeing.
SOMMER: Hence says, you know, that could mean 30 to 40% more rain in the eastern U.S. from those extreme storms. And that can overwhelm storm drains and infrastructure, and that causes flooding even if you don’t live next to a river.
MARTÍNEZ: Wow. I know the U.S. saw some pretty extreme heat waves this year. How much worse do you think those could get if the Earth warms, say, more than 1.5 degrees Celsius?
SOMMER: Yeah, right. I mean, that trend keeps going. So if the world warms 2 degrees Celsius, the Southern U.S. could see more than 30 extra days above 95. That’s a month more of days like that.
MARTÍNEZ: Wow. All right, so world leaders meet this week to negotiate how to avoid a future like this. Is it inevitable, really, at this point that the Earth goes beyond 1.5 degrees Celsius?
SOMMER: Yeah, I mean, if countries don’t change course. So if we keep burning fossil fuels at the same rate, it looks like the planet will go beyond 1.5 sometime in the next decade. But Deepti Singh, who is an assistant professor at Washington State University, says, you know, it’s not too late.
DEEPTI SINGH: We’re not destined to some catastrophic climate. We know that we can have a future that is more equitable and less volatile if we limit the warming through our actions today.
SOMMER: She says every fraction of a degree matters to limit the impacts of climate change. You know, it’s not all or nothing. So 1.6 is just as important as 1.5 degrees when it comes to the planet’s future.
MARTÍNEZ: That’s Lauren Sommer from NPR’s climate desk. Lauren, thank you.
SOMMER: Thanks. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
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