Comer Asks Fed for Info on Asset Manager Social Policies

House Oversight Committee Chair Rep. James Comer, R-Ky., sent a request to the general counsel of the Federal Reserve Board of Governors on Monday seeking more information on how environmental, social and governance (ESG) policies continue to influence the actions of asset managers.

"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," Comer wrote in his letter to board general counsel Mark Van Der Weide. "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."

In May, Comer's panel held a hearing to examine how asset managers and activist shareholders are teaming up with progressive advocacy groups to advance ESG priorities.

On Monday, Comer wrote that a number of alliances were created in recent years to "coordinate engagement within the financial services community to compel companies to take action to meet the goals of the Paris Climate agreement and institute other ESG measures."

He noted that these alliances "incorporate varying responsibilities of their members and certainly appear to require concerted actions by their signatories."

"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," the Kentucky Republican wrote. "These pledges also raise questions about whether other asset managers, who have not sought relief from the Federal Reserve Board, could be subject to the BHC Act, HOLA, and CIBC Act due to their concerted action with other asset managers."

"It is critical," Comer said, that the Oversight Committee "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."

To assist the committee in its investigation, Comer laid out 12 questions for Van Der Weide and set a March 11 deadline for him to respond with the requested information.

The Oversight chair also reminded the general counsel that the committee has broad powers to look into "any matter" at "any time" under House Rule X.

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