HFSC GOP Targets NGOs, Banking-Agency Climate Scenarios/Principles

As anticipated, Republicans continued their campaign against ESG at today’s HFSC Financial Institution Subcommittee hearing on climate risks, reiterating arguments that a regulatory focus on climate risk signals financial institutions to cease lending to carbon intensive industries. Chairman Barr (R-KY) strongly criticized the banking agencies’ involvement in climate policy, singling out Fed Vice Chair Barr and linking the failure of other Fed Governors to see the SVB report to what he believes will be an opaque, biased report on climate scenario data. Committee Democrats strongly defended the banking agencies’ climate work, stressing the climate risk materiality. The banking agency witnesses all emphasized that none of their agencies tell banks to whom they can lend, focusing solely on financial risk and deferring climate policy to Congress. A witness clearly added by committee Democrats countered the GOP’s anti-ESG focus by noting that local governments have been fiscally hamstrung by state-level anti-ESG laws.