House Oversight Committee Chairman Rep. James Comer sent a letter Monday to the Board of Governors of the Federal Reserve System General Counsel Mark Van Der Weide, requesting more information regarding how environmental, social and governance (ESG) policies continue to drive asset manager actions.
The Daily Caller first obtained a copy of the letter in which Comer specifically Comer states that additional information is necessary to determine whether ESG-related actions “trigger requirements” under the Bank Holding Company (BHC) Act, the Homeowners Loan Act (HOLA) and the Change in Bank Control (CIBC).
“The Committee on Oversight and Accountability is conducting an ongoing review of the integration of environmental, social, and governance (ESG) policies across the U.S. economy. As part of this review, the Committee is examining whether (1) certain asset managers are in breach of agreements with the Federal Reserve System and (2) how the broader asset management industry may be subject to the Bank Holding Company (BHC) Act, the Home Owners Loan Act (HOLA), and the Change in Bank Control (CIBC) Act as a result of ESG related pledges and actions taken pursuant to those pledges,” Comer wrote in the letter. (RELATED: EXCLUSIVE: Jim Jordan, House Republicans Launch Investigation Into BlackRock, Vanguard, Others Over ESG Practices)
In May 2023, the House Oversight Committee held a hearing to look into how asset managers and activist shareholders are partnering with left-wing advocacy groups to push ESG priorities.
Here Is What Comer Asks In The Letter:
- Were you made aware of the aforementioned pledges and the accompanying actions the companies are taking to fulfill them when granting the determination letter?
- Has either company made you aware after receiving your determination letter that they entered into these agreements and the associated actions required of signatories?
- Does Board staff rely on self-certification by the companies to determine if the passivity requirements stipulated in your determination letter are being met?
- Does the Federal Reserve Board and/or its staff have an ongoing monitoring process to verify if the companies meet the passivity requirements of the determination letter?
- Are the above-mentioned pledges taken into consideration when determining control for these and other asset managers, notably when they have pledged to work in concert? If not, why?
- Does the Federal Reserve Board and/or its staff monitor the ongoing activities of the asset management industry to determine if their stewardship engagement triggers requirements under the BHC Act, HOLA, the CIBA Act or any other statute?
- If there is not an ongoing monitoring program, why not?
- Does the Federal Reserve Board and/or its staff monitor the ongoing activities of the asset management industry to determine if their proxy voting triggers requirements under the BHC Act, HOLA, the CIBA Act or any other statute?
- If there is not an ongoing monitoring program, why not?
- Would taking action, including “implementing stewardship and engagement strategies with a clear escalation and voting policy … for all assets under management” as called for under the NZAM pledge raise questions of control under the BHC Act, HOLA or CIBC Act and change your opinion on the determinations you made in your 2019 and 2020 letters? If they do not, why not?
- Would coordination among asset managers working in concert to be “active owners” as called for by PRI raise control issues under the BHC Act, HOLA or CIBC Act and change the opinion you articulated in your determination letter? And if not, why?
- Is working in concert to achieve the goals of these agreements in severable across entities, warrant an aggregation test counting the ownership across signatories whereby a party would meet the ownership threshold by virtue of entering into the agreement, thus exposing all signatories to potentially being subject to the Federal banking laws?
READ THE LETTER HERE:
(DAILY CALLER OBTAINED) — … by Henry Rodgers
“Pledges to act in concert with other signatories, actively pursue outcomes and use all assets under management to achieve the stated goals of the various agreements, appear to directly violate the terms laid out in your 2019 and 2020 letters … It is critical we understand whether asset managers are abiding by the conditions the Federal Reserve has set for them and whether the Federal Reserve and other Federal banking regulators are monitoring the asset management industry’s activities,” Comer continued. (EXCLUSIVE: House Judiciary Chairman Jim Jordan, Rep. Dan Bishop Threaten Subpoena Of ESG ‘Cartel’)
Comer called for responses to his questions no later than March 11, 2024.