House Oversight & Accountability Committee Issues Testimony From Ala. A.G. Marshall
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I. Introduction
Chairman Comer, Ranking Member Raskin, and members of the Committee, thank you for the opportunity to be here today to discuss the important issue of environmental, social and governance (ESG) and its impact on the people we serve.
My name is
ESG is a clear and present danger to consumers and to our democracy. An unelected cabal of global elites are using ESG, a woke economic strategy, to hijack our capitalist system, coerce corporations, and threaten the hard-earned dollars of working Americans. ESG must be stopped.
Republican attorneys general are fighting back against ESG. I am proud of the work that my colleagues and I have done to protect consumers from the many harmful consequences of ESG.
II. Attorneys General are charged with protecting consumers.
Protecting citizens from illegal, harmful conduct is a solemn responsibility of elected officials.
States typically empower the attorney general to represent the state's interests in court and to enforce the state's consumer protection laws.1 In Alabama, the attorney general has authority to enforce the Deceptive Trade Practices Act, which prohibits any "unconscionable, false, misleading, or deceptive act or practice in the conduct of trade or commerce."2 The attorney general has the power to conduct investigations,3 send subpoenas,4 seek injunctions,5 and file lawsuits.6 Only the attorney general may bring class action claims under the Deceptive Trade Practices Act.7 Federal and state laws also prohibit anti-competitive activity in order to protect consumers. Under the Sherman Act, "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal."8
Elites from around the globe have formed alliances to coordinate together to implement woke climate policy. These alliances threaten consumers by limiting output, raising prices, risking retirement funds, and creating anti-competitive conduct. In
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1 See, e.g., Ala. Code Sec. 36-15-12 ("The attorney general is to institute and prosecute, in the name of the state, all civil actions and other proceedings necessary to protect the rights and interests of the state.").
2 Ala. Code Sec. 8-19-5(27).
3 See Ala. Code Sec. 8-19-4(a) ("The office of the Attorney General and the district attorneys shall have the following functions, powers, and duties: . . . (1) Conduct preliminary investigations to determine the merit of complaints, . . .");
4 Ala. Code Sec. 8-19-9 ("Before any action is commenced, the Attorney General or the district attorneys may issue subpoenas to any person to appear and produce relevant papers, documents, and physical evidence, and administer an oath or affirmation to any person, in aid of any investigation or inquiry into possible violations of this chapter.").
5 Ala. Code Sec. 8-19-8 ("Whenever the office of the Attorney General or the office of the district attorney has reason to believe that any person is engaging in, has engaged in or is about to engage in any act or practice declared to be unlawful by this chapter, the Attorney General or the district attorney may bring an action in the name of the state against such person to restrain by temporary restraining order, temporary or permanent injunction such acts or practices.").
6 Ala. Code Sec. 8-19-4(a)(2) ("The office of the Attorney General and the district attorneys may otherwise receive and investigate complaints with respect to acts or practices declared to be unlawful by this chapter, and inform the complainants with respect thereto. Said persons may institute legal proceedings or take such other actions provided for herein which are necessary or incidental to the exercise of its powers and functions.").
7 Ala. Code Sec. 8-19-10(f), (g); see also Green v.
8 15 U.S.C. Sec. 1.
9 Ala. Code Sec. 6-5-60(a).
10 See generally
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A. The global elites work around elected leaders in the
In
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11 The Paris Agreement, United Nations Climate Action, available at https://www.un.org/en/climatechange/paris-agreement.
12 Id.
13 Id.
14
15
16
17
18
19 Id.
20 Id.
21 Id.
22 Id.
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The strategy for private actors to implement climate policy despite the decision by the president of
The
This Climate Action 100+ project will launch on
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23 Global investors launch new initiative to drive action on climate change by world's largest corporate greenhouse gas emitters,
24
25
26 Paris Summit Focused on Boosting Funding for Climate Change Fight,
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Climate Action 100+. Climate Action 100+ launched in
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27 Global investors launch new initiative to drive action on climate change by world's largest corporate greenhouse gas emitters,
28 Id.
29 Id. Last year, members of
30 Investor Signatories, Climate Action 100+, available at https://www.climateaction100.org/whos-involved/investors/; Companies, Climate Action 100+, available at https://www.climateaction100.org/whos-involved/companies/.
31 About,
32 Id.
33 Members,
34 FAQ, Paris Aligned Asset Owners, available at https://www.parisalignedassetowners.org/news-resources/faq/.
35 Paris Aligned Asset Owners, 2022 Progress Report, at 5, available at https://www.parisalignedassetowners.org/media/2022/11/PAAO-Progress-Report-November2022_Final.pdf.
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Paris Aligned Asset Owners currently has 56 asset owners, with over
B. The global elites work around an evenly divided
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36 Commitment, Paris Aligned Asset Owners, available at https://www.parisalignedassetowners.org/commitment/.
37 Paris Aligned Asset Owners, available at https://www.parisalignedassetowners.org/.
38 Leading Asset Managers Commit to Net Zero Emissions Goal with Launch of Global Initiative,
39 Net-Zero Asset Managers Initiative, available at https://www.netzeroassetmanagers.org/.
40 Leading Asset Managers Commit to Net Zero Emissions Goal with Launch of Global Initiative,
41 Signatories, Net-Zero Asset Managers Initiative, available at https://www.netzeroassetmanagers.org/signatories/.
42 See
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43
44 Id. at 2.
45 About,
46 Id. The seven alliances are the
47
48 Id.
49 Id.
50 NZBA responds to recent research on fossil fuels, coal,
51 Members,
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One founding member described the leverage the
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52 Global insurance and reinsurance leaders establish alliance to accelerate transition to net-zero emissions economy,
53 Id.
54 Id.
55 Members,
56 Net zero gets boost from global financial powerhouses,
57 Id.
58 Id.
59 Id.
60 Signatories,
61 Investment consultants with
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The
These alliances share several important similarities. They are created by the
This private coordination is designed to accomplish what could not be done through normal democratic processes. These alliances seek to implement woke ESG policies by starving a company of capital, staging a mutiny from within through hostile shareholder resolutions or director votes, or scaring a company to surrender to the ESG bullies. Never mind that the woke ESG policies are almost always not in the best interests of the company.
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62
63 Id.
64 The Net Zero Investment Consultants Commitment, #1, #4, available at https://www.unpri.org/download?ac=14612.
65
66 Id.
67 Id.
68 Id.
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This private coordination also is designed to accomplish what could not be done through a free market. Without this unlawful coordination, the free market would not implement ESG at the scale and pace demanded by the radical ESG activists. ESG requires companies to forego otherwise profitable economic transactions to achieve woke social policy, often abandoning pecuniary interests and fiduciary duties.
C. The alliances created by global elites hurt consumers.
These global alliances hurt consumers by breaching fiduciary duties. Those entities entrusted with Americans' money have a fiduciary duty to act in their investors' best interests by maximizing profit. ESG funds do not maximize return. According to one chief investment officer, "Over the past five years, global ESG funds have underperformed the broader market by more than 250 basis points per year, an average 6.3% return compared with a 8.9% return."69 Prioritizing some investments, loans, or insurance policies, and excluding other investments, loans or insurance policies, based on woke ESG principles instead of potential profitability is inconsistent with companies' fiduciary duties.
ESG is not good for fiduciaries, and it is not good for American workers. The retirement savings of many Americans are invested, advised, or otherwise affected by an entity that is participating in a net-zero alliance. Woke agendas should not impact how the dollars of hard-working American workers are invested. Americans who have responsibly saved for retirement should not be harmed by irresponsible, woke investment managers.
These alliances also hurt consumers by increasing energy prices. To accomplish their net-zero goals, these alliances must work to phase out fossil fuels. Energy output is then limited, which results in higher prices for consumers. Of course, energy and utility costs are regressive. Our nation's lowest-income households spend almost one-quarter of their disposable income on energy costs.
These alliances also hurt consumers through anti-competitive conduct and agreements to coordinate. Alliance members appear to be conspiring and combining to restrain trade and commerce by colluding with other members to reduce competition amongst themselves and coordinate restricted investment toward specific companies unless certain ESG policy objectives are implemented. In these alliances, asset managers, banks, and insurers are required to share information with each other, convey common messages to common companies, and take common action with their assets, loans, or insurance policies against those same common companies.
American companies in the
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69
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Morgan Stanley uses very similar language: "The targets, as well as our broader measure-manage-report framework, align with our public commitments, specifically the
Global elites are advancing ESG through unlawful and anti-democratic means. But Republican attorneys general are fighting back to protect consumers from harm caused by woke ESG policies. Republican attorneys general have:
* Launched an investigation into the
* Launched an investigation into Climate Action 100+ and its global steering committee members:
* Launched an investigation into
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70 Bank of America, Approach to Zero: Our commitment to helping finance the transition to net zero before 2050,
71 Citi, Net Zero Emissions Commitment, available at https://www.citibank.com/citi/sustainability/net-zero.htm.
72 Morgan Stanley, Reaching Net-Zero Financed Emissions, available at https://www.morganstanley.com/about-us/sustainability-at-morgan-stanley/net-zero-financed-emissions.
73 See
74 Id.; see also
75 Letter from
76 JPMorgan, Goldman face probe by 19 states over ESG investing,
77
78
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* Warned asset managers to not violate the law through ESG investment practices;79
* Criticized the ESG investment practices of Blackrock;80
* Criticized the ESG practices of two proxy firms,
* Demanded S&P stop publishing ESG credit indicators as part of its credit ratings for states and local governments;82
* Filed a protest with the
* Sued the
* Opposed the
* Opposed the
* Opposed the
* Opposed the
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79
80
81 Attorney General
82 AG Statement: Utah Letter Blasts S&P on ESG Ratings,
83 Republican attorneys general target Vanguard's ESG policies in protest with
84 Attorney General
85
86
87 Letter from Attorney General Reyes et al. to the
88 Letter from Attorney General Reyes et al. to the
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* Opposed the
* Opposed the
* Warned the Acting Comptroller of the Currency that attorneys general would take any necessary legal action if the new chief climate risk officer abused power;91 and
* Opposed the
Attorneys general will continue pushing back at any effort by private actors to implement woke ESG policy. Attorneys general also will continue to oppose efforts by the
V. Conclusion
ESG threatens America's prosperity. Americans want good-paying jobs, energy independence, more money in their monthly budget, and to enjoy retirement. Because the free market would not implement ESG like the radical ESG activists demand, they must unlawfully coordinate and breach fiduciary duties to impose their woke vision on American workers. ESG threatens American prosperity, and it must be stopped.
ESG also threatens America's energy independence and national security. ESG artificially constricts our most foundational economic sectors, such as energy. In
ESG also threatens America's democratic system. In this country, important policy decisions are supposed to be made through the process set forth in the
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89 Letter from Attorneys General Morrisey and Reyes et al. to the
90 Letter from Attorney General Reyes et al. to the
91 Letter from Attorney General Reyes et al. to the Acting Comptroller of the Currency,
92 Letter from Attorney General Reyes et al. to the
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Republican attorney generals are defending Americans from these global elites and radical ESG activists. We appreciate the attention this Committee and members of
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Original text here: https://oversight.house.gov/wp-content/uploads/2023/05/Marshall-written-testimony.pdf
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