In this week’s edition of Economy and Society:
- Republicans ask SEC to drop ESG rules
- EU parliament votes to delay ESG rule
- Tennessee drops Wells Fargo investigation
- NYC pensions focus on net-zero
- ESG shareholder proposals fall one-third
In Washington, D.C.
Republicans ask SEC to drop ESG rules
What’s the story?
The House Financial Services Committee sent a letter last week to the Securities and Exchange Commission (SEC) asking the agency to rescind several Biden-era climate-related rules, including:
- a proposed rule that would require additional ESG fund disclosures and
- a finalized rule requiring ESG-labeled funds to invest at least 80% of their assets in ESG-related securities.
Why does it matter?
The fight over ESG disclosures is part of a broader debate about the SEC’s role in climate policy. The outcome will shape how trillions in investment funds are labeled, marketed, and regulated.
Read more
According to ESG Dive:
The SEC’s “Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices” rule was among ESG-related regulations in the rulemaking or proposal phase at the agency expected to be on the chopping block under the Trump administration.
The rule was designed to prevent greenwashing and would create additional proxy and engagement disclosures for investment companies, as well as require funds with ESG terms in the name use such factors as a “significant or main consideration.” Certain ESG funds that consider environmental factors would also be required to disclose greenhouse gas emissions metrics in the portfolio, according to the proposal.
Last year, 21 congressional Democrats — four senators and 17 House representatives — urged former SEC Chair Gary Gensler to finalize the greenwashing rule. Now, with Republicans in control of the executive branch, as well as the House and Senate, the rule is unlikely to ever reach a final stage.
EU parliament votes to delay ESG rule
What’s the story?
The European Parliament voted last week to delay the implementation of ESG regulations, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
Why does it matter?
The vote was the latest step in the EU’s consideration of revisions to the ESG rules. The leaders of some countries, including Germany and France, have argued the regulations are too burdensome and could hurt the bloc’s economic and business competitiveness.
What’s the background?
See here for more on the EU’s efforts to delay implementation the rules.
Read more
According to ESG Today:
Lawmakers in the European Parliament announced today an agreement to approve the European Commission’s ‘stop-the-clock’ directive, delaying the implementation of key sustainability reporting and due diligence regulations, including the CSRD and CSDDD.
The agreement was supported by a large majority of MEPs in a 531 – 69 vote, despite a series of amendments submitted by far-left and right parties, which included proposals ranging from outright rejecting the directive to extending the delay of the sustainability reporting rules to 15 years.
The announcement, following the approval last week of the ‘stop-the-clock’ directive by member state representatives in the EU Council, marks a significant step in the Commission’s Omnibus I package, aimed at significantly reducing the sustainability reporting and regulatory burden on companies, and particularly on SMEs.
In the states
Tennessee drops Wells Fargo investigation
What’s the story?
Tennessee Attorney General Jonathan Skrmetti (R) last week closed his investigation into whether Wells Fargo coordinated with other financial institutions to promote net-zero climate policies in violation of antitrust laws.
Why does it matter?
The investigation was part of a broader effort by Republican attorneys general to challenge coordination among financial institutions on climate policy. Skrmetti closed the case after the bank announced plans to move away from net-zero commitments.
Read more
According to ESG Dive:
The San Francisco-based bank in February said it was scrapping net-zero financed emissions goals and discontinuing 2030 sector-specific targets on financed emissions that focused on carbon-intensive sectors like oil and gas, power, aviation, steel and automotive production.
The group of states has probed whether Wells Fargo and five other U.S. banks — Bank of America, Citi, Goldman Sachs, JPMorgan Chase and Morgan Stanley — have violated antitrust or consumer protection laws by implementing net-zero emissions policies and limiting financing.
“Companies exist to make money, not policy,” Tennessee Attorney General Jonathan Skrmetti said in a statement Thursday. “I commend Wells Fargo’s pro-consumer decision to step away from utopian policymaking, and I look forward to the rest of America’s major financial institutions following its lead.”
NYC pensions focus on net-zero
What’s the story?
New York City Comptroller Brad Lander announced last week that the New York City pension system decreased portfolio greenhouse gas emissions 37%, putting it a year ahead of schedule in its decarbonization plan.
Why does it matter?
Lander has prioritized decarbonization in managing New York City’s pension funds. He says the system’s approach is a model for climate leadership as the federal government pulls back from climate policy.
Read more
According to a press release from Comptroller Lander’s office:
New York City Comptroller Brad Lander and trustees of three of New York City’s public pension fund boards, today announced dramatic declines in greenhouse gas emissions financed by their public equity and corporate bond investments as of the end of fiscal year (FY) 2024. Between 2019 and 2024 there was a 37% weighted average reduction in Scope 1 and 2 greenhouse gas emissions for the New York City Employees’ Retirement System (NYCERS), Teachers’ Retirement System (TRS), and Board of Education Retirement System (BERS). This exceeds the 2025 interim targets adopted by each system as part of their Net Zero Implementation Plan, one year ahead of schedule.
The funds have also significantly outpaced their targets for investments in renewable energy and climate solutions. The Systems’ carbon footprint reduction—along with the10% combined net investment results that exceed the actuarial target of 7%—show that divestment from fossil fuels improves climate outcomes in our portfolio without compromising returns. …
“We will not retreat from our strong climate action, a position that remains consistent with our fiduciary duty. Climate risk is financial risk, as exhibited by the unprecedented wildfires, extreme flooding, and dangerously hot temperatures become more prevalent throughout the globe. Some may cave to the Trump Administration and reverse their climate commitments, but we will not be deterred from jointly prioritizing our climate goals and financial responsibilities,” said New York City Comptroller Brad Lander.
On Wall Street and in the private sector
ESG shareholder proposals fall one-third
What’s the story?
The number of pro-ESG shareholder proposals submitted during the 2025 annual meeting season fell 34%, according to a report from ESG supporters As You Sow and Proxy Vote.
Why does it matter?
The report’s authors argue opposition to ESG and DEI under the Trump administration made climate change less prominent in corporate discussions.
Read more
According to Investment Executive:
This decline in ESG-related filings is being driven by the shifting political climate, and particularly the changes at the U.S. Securities and Exchange Commission (SEC), [the report] suggested.
“Proponents have largely taken a ‘wait-and-see’ approach, electing not to file resolutions until they were able to assess the direction of the new SEC,” the report said. “This approach was validated as it quickly became clear that some proposals that had been allowed by the SEC for decades, began to be omitted.” …
“Another factor in the drop in filings is that more companies engaged in dialogue with shareholders in order to avoid both the need for proposals and the related publicity that could draw attention to them given the current political attacks on DEI and climate,” the report said.