Veris Goes to Washington: Insights from US SIF’s 2023 Capitol Hill Day & Member Day
The US Sustainable Investment Forum (US SIF) is a member-based organization, established to be the leading voice advancing sustainable investing across all asset classes. Their mission is to rapidly shift investment practices toward sustainability, focusing on long-term investment and the generation of positive social and environmental impacts.
Veris was proud to co-sponsor US SIF’s 2023 Capitol Hill Day and Member Day in Washington D.C. this summer. Our firm sent Veris CEO Stephanie Cohn Rupp; CIO Michael Lent, Managing Director of Research Roraj Pradhananga, and Director of National Client Service Karen Walls deRochemont to Washington to participate in both events.
Roraj Pradhananga, Michael Lent, and Karen Walls of Veris Wealth Partners in front of the US Capitol building.
Capitol Hill Day Activities
As part of Capitol Hill Day, approximately 50 US SIF members met with the offices of 40 different Representatives and Senators from both sides of the aisle to help educate members of Congress on financially material Environmental, Social and Governance (ESG) factors and data and why they are important to investors, urge them to support SEC disclosure proposals around climate risk and human capital issues, ask members to support the Congressional Sustainable Caucus in the US House of Representatives and to not allow riders to be attached to the Authorization’s bills that would limit the SEC’s authority.
The delegation from Veris spoke with congressional aides who work with members of Congress including Senators Chuck Schumer (D-NY), Senator Thom Tillis (R-NC) Corey Booker (D-NJ), Robert Menendez (D-NJ), Jeanne Shaheen (D-NH), and Maggie Hassan (D-NH), Angus King (I-ME), Michael Bennet (D-CO) and Representatives Chris Pappas (D-NH) and Ann Kuster (D-NH).
It was an honor to walk the halls of Congress in support of our firm’s mission and our clients’ vision for the future.
Member Day Activities
The delegation from Veris also participated in US SIF’s Member Day event, which gathers together some of the leading voices of the sustainable investment movement for knowledge sharing and field-building conversations.
At 2023’s Member Day event, we heard remarks from Representative Sean Casten (D, IL-6), Co-Chair of the Congressional Sustainable Investment Caucus, engaged in a listening session with incoming US SIF President Maria Lettini, and heard from industry experts on topics including refocusing the narrative around anti-ESG messaging and the Environmental Protection Agency’s Greenhouse Gas Reduction Fund.
Stephanie Cohn Rupp, CEO of Veris Wealth Partners and US SIF’s Director of Education and Outreach Michael Young.
The Veris Delegation’s 6 Major Takeaways
1. Congressional offices are knowledgeable about ESG topics.
During our Capitol Hill Day experience, the Veris team saw high levels of conviction and interest from legislative aides who were extremely well versed in the legislative issues around ESG topics. It was inspiring to see so many passionate young professionals who are working to educate our congressional representatives and senators about pending legislation.
We also saw signs of progress made in terms of greater congressional awareness of relevant critical issues surrounding ESG and in the depth of the questions that had to address their concerns. For example, Senator Chuck Schumer and his aide were very aware of EU Sustainable Finance Disclosure Regulation (SFDR) and the Sustainability Accounting Standards Board (SASB). Their primary questions were around avoiding the pitfalls they have seen Europe face. They wanted our thoughts on the best approach for how to incorporate and codify disclosure rules going forward. They were digging into these topics in detail to inform decision making and rulemaking.
Hopefully the Congressional Sustainability Investment Caucus, which was created to help inform Congress about ESG topics, will continue to look for new Representatives to join to continue to be internal advocates for these critical issues.
2. There is strong support for SEC disclosure rules.
All the Democrats that the Veris delegation spoke with were supportive of SEC disclosure rules on Climate Risk and Human Capital Management.
When we advocated for the passage of SEC disclosure rules, we heard aides say that they see it as a way of increasing transparency for investors so they can better understand the potential impacts of their investment. We heard some aides emphasize the need for public messaging around the potentially negative impact of not including financially material ESG factors in investment decision making.
The primary concern we heard from our Congressional representatives around standards requiring Scope 3 emission measurement and reporting, was that the requirements might place regulatory burdens on corporations and small businesses. They are concerned about the impact on farmers and the restaurant industry especially and are seeking ways to address these issues.
Veris’ Managing Director of Research Roraj Pradhananga with members of US SIF.
3. We heard support for universal global standards.
One major refrain we heard concerned the need for universal global standards for measurement and reporting of material ESG factors to make it easier for businesses to comply. Linda-Eling Lee, Head of ESG research at MSCI, said that it will be important to ensure that the US standard is consistent with the regulatory framework in Europe. Universal global standards would make it easier for businesses that operate both in the US and in Europe to comply, because they would not have to abide by two separate sets of rules.
4. US Congress members on both sides of the aisle need to hear from ESG supporters.
We heard it expressed that our field needs to have a strategy for engaging Republican members of the Senate who seem to be persuadable to vote for policies that support ESG investing. This is particularly important because there are concerns that SEC rulemaking could be blocked by attachments to the appropriation bills in September.
We also heard from congressional staffers that Democrats need to hear from their constituents on these issues just as much as Republicans do. Hearing from constituents is very important for driving action in Congress across the political spectrum.
As part of the conversation with Senator Mendez’s office, we discussed the fact that the House passed the Corporate Governance Improvement and Investor Protection Act, which would require disclosure of racial, gender, ethnicity of the board and C-suite members of public companies, in June of 2021 but it still hasn’t passed in the Senate. This Act includes many provisions we want to see, including disclosure on diversity, lobbying, C-Suite compensation, climate related risks, and more. Senator Menendez is pushing for more corporate governance disclosure and there is the potential for movement on that soon. If you support that, you may wish to write to your senators to express your views.
5. We need to get better at explaining ESG.
One of the major themes of the conversations that took place at US SIF’s Member Day event was that, as a field, we need to do a better job of explaining what ESG is and why integration of financially material ESG factors is so important in investment decision making.
Most of the anti-ESG sentiment is broad and focuses on terminology instead of real-world concerns. Critics of ESG tend to attack the acronym in general ways – calling it “woke capitalism” instead of pointing to specific issues.
We heard an idea expressed that the best approach would be to focus on our shared values and find ways to talk about financially material ESG factors and ESG in personal terms so that it’s more relatable. One powerful way to do this would be to offer real-world examples of environmental, social, and/or governance factors guiding decision-making. For example, increased wildfire risk due to climate change has already led at least two major insurance companies to stop offering homeowners insurance in the state of California.
Take a look at ESGtruths.com to get specific talking points to help connect with people – your friends, family, colleagues and elected representatives alike.
6. US SIF seeks to further build the field.
US SIF is helping to build the field of sustainable investing through research, education, media outreach, and policy advocacy. Your voice and perspective can help accelerate that work.
If you are not already a member, consider joining US SIF. Membership is open to asset owners and asset management firms, and other types of organizations and service providers that are active in the field of sustainable and responsible investing.
If you are a member, US SIF’s New CEO Maria Lettini said at Member Day that she is actively seeking feedback on the future of the organization. She wants to hear from Members on what vision for the future we collectively want to see the organization advocating for. If you are a member, you can contact US SIF to express your ideas about the best path forward.
Disclaimer
The information above is provided for informational purposes only, represents only a summary of topics discussed, does not constitute investment advice, and solely reflects the views of the authors, which are subject to change without notice. Additionally, this document contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such third-party sources and take no responsibility, therefore.
Although Veris has highlighted herein various initiatives relating to policy activism in which it has participated, no inference should be drawn as to the success or failure of such initiatives or the ultimate impact on the financial or impact results achieved by our clients.
