The Battle for US Sustainable Finance Regulation

An InfluenceMap Briefing
February, 2021

How lobbyists are lined up for and against emerging US policy

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  • In the final year of the Trump Administration, authorities finalized three rules which have the effect of limiting the opportunities for ESG (Environmental, Social and Governance) investing. These are (1) The SEC's Shareholder Proposal Rule, which erodes shareholder rights by increasing the barriers to submitting and voting on proposals. (2) A Department of Labor rule which limits the use of ESG investments in retirement plans. (3) A Department of Labor rule which restricts the ability for fiduciaries to vote on ESG issues.

  • An analysis of lobbying surrounding these changes highlights a rift between the asset management sector, and oppositional 'real-economy' forces. Given this issue is likely to be a key policy debate during the Biden Administration, this analysis also reveals how the corporate battlelines will likely form around any push to reverse these rules or introduce new strands of sustainable finance regulation.

  • InfluenceMap's well-recognized method for assessing corporate influence over policy relies on the scoring of numerous pieces of relevant, public documents (such as comments on pending government regulations). Full details of our methodology can be found here. In this briefing, InfluenceMap used a key part of this methodology which relies on corporate comments to governmental regulatory consultations to score corporate positions on US policy.

  • ExxonMobil and General Motors strongly supported the SEC's rollback on shareholder rights, alongside powerful industry associations such as the US Chamber of Commerce, Business Roundtable, and the National Association of Manufacturers. Meanwhile, most of the financial sector stated strong opposition to the SEC's Shareholder Proposal Rule, except for U.S. financial giant, Vanguard. Small and active asset managers which would be significantly affected by the regulatory changes (e.g. Zevin Asset Management and Trillium Asset Management) as well as asset managers that are leading the sector in their active engagement with companies on ESG issues (e.g. Legal & General Investment Management and Nuveen) strongly opposed the rollback.

  • Similarly, the financial sector has shown overwhelming opposition to both rollbacks of the Department of Labor's 'fiduciary duties' rules, including the 'Big Three' (BlackRock, Vanguard, and State Street) along with lead ESG engagers, Legal & General Investment Management and Nuveen. In turn, leading industry trade associations supported the rollbacks, including the U.S. Chamber, the National Association of Manufacturers (NAM) and the American Legislative Exchange Council (ALEC).

  • While the former Trump Administration oversaw financial sector rollbacks to limit ESG investing opportunities, the EU made significant progress in advancing sustainable finance rules. Should the Biden Administration follow the EU lead, this briefing note gives a strong indication of how the corporate lobbyists are likely line up in support or opposition to further changes.

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