Warned companies to not violate the law. And initiated litigation where warranted. Republican attorney generals are defending americans from these global elites and radical g. S. E. Advocates. We appreciation the attention of this committee and members of congress are giving to e. S. G. This conversation and debate is one that must be returned to you, our nations policymakers. Thank you for the time and being here today. Thank you, general reyes. Chairman comer, ranking member, and members of the committee. Thank you for letting me testify before you on e. S. G. Factors are distorting our fangs systems and harming consumers and working class americans. It involves some of the biggest and most powerful players in the Global Economy forcing costly operational changes on American Companies in pursuant of the 2025 pairs Paris Agreement goals. These goals have never been adopted by congress. But contemplate changes to our way of life that are farreaching and fundamental. These changes involve balancing tradeoffs. How quickly or slowly the government imposes new technologies and how reliable of a power grid well have. Governor reyes my view we can trust consumers promote Energy Independence or dominance and avoid as much regulation as possible. Answering these difficult questions is the role of the peoples elected representatives in our republican form of democracy. That would be each of you in congress and state and local policymakers, not me or unelected bureaucrats, foreign governments, Asset Managers, or anyone else. Ever since the signing of the Paris Agreement theres been and open conspiracy to bypass congress. Some of these groups are Climate Action 100, which includes the largest Asset Managers, banks, and Insurance Companies globally. These organizations seek to use are collective market power over tens of trillions in assets. They drive up cost of goods and harm shareholders. In sum, e. S. G. Is undemocratic tax on our economy and productivity. E. S. G. Also weakens Americans National security and allies for all the reasons my khraog outlined. Many renewables require rare earth elements and supply chain needs dominated by china. Thus adopting these fundamental changes to our Energy Supply provides china more leverage over our economy and security. The various problems with e. S. G. Present a multifaceted topic beyond the scope of any single hearing. In addition to the more ma crow e. S. G. Concern, the general marshal and i have raised, i give you these concerns today. Areas the committee can and sure investigate further. The first is the roll of asset manager agreements on Utility Companies and whether the federal Energy Regulatory commission or ferc is doing its job to ensure Asset Managers who collectively own significant percentages of utility stock are improperly influencing the operation of those utilities. The second is the role of proxy Advisory Firms and making religiouses based on the goals of pressure groups rather than shareholders best interests. In one particular case it includes a proposal for considering race in insurance underwriting which violates am cam antidiscrimination laws and should not be on proxy statements. The third is the recent department of labor rule allowing erisa fiduciaries to consider collateral factors. This is a severe weakening of the rule. I applaud you the bipartisan action you took in congress to repeal this rule and the c. R. A. Its only because of the president s veto this rule presently stands. Im proud to be leading a coalition of 26 states along with private parties challenging this rule in court. In conclusion, im not here to debate the policy of e. S. Or g. , there is a time and place for that. And while it may not be today or in this committee, i am convinced it is in this larger body of congress where such policy should be determined. So film not here to dispute or defend policy, what is my purpose . Im here to warn you about the process of involved in effectuating e. S. G. Goals. No matter how much you may agree with the policy shall pushed, if you deconstruct the process it is a flawed and dangerous one and may also be illegal. The process threatens your prerogative as representatives of the people. It gives no consideration to checks and balances or separation of powers. It ignores the rule of law, undermines our american system of lawmaking. However inefficient and vexing it may be. It focus all the power sectors of the Financial Center into one organized syndicate of pressure. Whenever such a concentrated away rey of power conspeurs together for spaefbg outcome, we must be airy. As state a. G. s well exercise our power to expose these entanglements. We hope you use your power to do the same. Chair comer the chair recognizes treasurer freichs. Mr. Freichs thank you. Good morning, chairman comer. Ranking member raskin, members of the committee. Im Michael Freichs and i am aet Illinois State treasure. The states chief investment and banking officer, in that role my office madges approximately 52 billion. Including 26 billion in state funds. 17 billion in College Savings and retirement funds. And about 9 billion on behalf of local and state governments. I serve as trust tea which manages approximately 28 billion in pension assets for 230,000 beneficiaries. It is my job to protect and grow the hardearned savings of families across the state. As well as funds that state and locals depend upon. I take this responsibility very seriously. Whether its the single popl trying to save for her kids College Tuition or town fans tp pbsing new schools, i know they are trusting our office to grow returns on those funds over the long term and ensure that they have the money they need in the meantime. I am tasked with investing not just for the next quarter, but with the goal of maximizing returns over the next quarter century. This is what brought me here today. We are witnessing a widespread, highly coordinated, politically motivated attack on investors and the hardworking people they serve. This pushback is antifree market and antiinvestor. It is misleading and harmful. It harms retirement savers. Pensioners. Working people, businesses, and harms america. This coordinated campaign is focused on e. S. G. Investing. Most people dont know what e. S. G. Is. E. S. G. Is data. It is simply Additional Information that investment professionals use to assess risk and return prospects. It is about value not about values. In order to maximize returns an investor must be able to manage and mitigate risk. The more tate data we as investors have, the better informed our decisions are when selecting investments over the long term. E. S. G. Is about looking at a wider range of risks and value opportunities that have material Financial Impact on investment performance. For example, if you are investing in a pharmaceutical company, thinking about whether that company has exposure to massive lawsuits because of its role in the opioid epidemic. Our approach is toeupbt great material e. S. G. Factors into Investment Decisions along with many other considerations. We are not ignoring traditional financial factors like profitability and creditworthiness. We are integrating more gate data into our decisions to give us a better idea of risk and growth prospects. This approach is backed by academic rich. But its also common sense. Companies that value their workers have less turnover and higher productivity. Companies that build a strong Corporate Governance structure be more resilient and valuable over the long term. While i welcome healthy debate about best practices and die douchary duty, i do not like blacklists or overreaching legislation that strips individuals from investing. I do not ignore the research, fundamentally misunderstand the role of if i tkaoeurbaries, and impose real costs on taxpayers, pensioners, and hardworking families. When it comes to material data, its irresponsible to tell investment professionals to ignore information that they can use to do their jobs better. Frankly, im deeply concerned by the highly orchestrated attacks on the investment profession and the focus on restricting investors freedom to exercise their professional discretion and fiduciary duty. To Ask Investment professionals to ignore material risks and Investment Opportunities is asking us to stop doing our jobs. For example, should we ignore what Health Care Companies understaff their operations and jeopardize the safety of patients . Would you expect a company that does this to continue to increase in shareholder value . It would be irresponsible to ignore these issues like these. It would be foolish to hinder professionals abilities and their freedom to invest responsibly. This opposition to decades of work by investment professionals is a dangerous intrusion in our free market system. If unchecked, this war on investors will staoeufle economic growth, cost taxpayers and pension pensioners billions of dollars as many studies have already found. It will obstruct investors ability to protect and grow peoples hardearned savings. In closing, now is not the time to stop investors from considering prudent data that can lead to better returns over the longterm, the American Economy depends on investors, please let us do our jobs. Thank you for your time and attention. Chair comer without objection, representative magaziner will be waived on the committee for the purpose of asking questions at todays hearing. Without objection, so ordered. I want to remind our witnesses and the members before we enter into the question and answer phase that we have a fiveminute clock and we try to adhere to that fiveminute time frame. If someone asks a question, the tpaoeuplt expires, well give you an opportunity to answer it. Be mindful we have a lot of questioners and we want to get through this. Well begin questioning recognizing the gentleman from louisiana, mr. Higgins, for five minutes. Mr. Liggins mr. Higgins thank you, mr. Chairman. Part of the focus of our hearing today is based upon a recent letter signed by 21 attorneys general highlighting our organizations, including Asset Managers and proxy advisors could be violating state and federal law to channel funds for political objectives. In the category of e. S. G. Environmental, social, and government practices. One of my witnesses exclaimed that just expect to review whether or not some of your colleagues are violating the law. In the course of doing their job. From the second paragraph of that letter, which was signed, by the way, again, mr. Chairman, by 21 attorneys general, the second signature on that letter id like to submit for the record the Opening Statement of my own attorney general, my colleague and friend, attorney jeff landry, former congressman here in this body. Was not able to attend but i would like to submit his statement for the record, mr. Chairman. Mr. Comer without objection. Mr. Higgins thank you, mr. Chairman. From the second paragraph of the letter signed by so many of our attorneys general addressing Asset Managers said these companies are some of the largest Asset Managers in the United States. Its important for American People watching to grasp this. Collectively controlling trillions of dollars of investments. Many individuals and organizations count on these Asset Managers to provide sound Investment Products and advice. The top three Asset Managers alone cast about a quarter of the votes for the s p 500 companies, shareholder meetings. They are therefore not only bound to follow the general laws discussed, but also have extensive responsibilities under both federal and state laws governing securities. Broadly those laws require that Asset Managers to act as a fiduciary and in the best interest of clients exercising due care and loyalty. Simply put, Asset Managers are not the same as political or social activists. And should not allow vast savings entrusted to be commandeered by activists like e. S. G. Activist organizations. Attorney general reyes, i would like to address the question to you, sir. Regarding to clarify for america what legal requirements must Asset Managers who act as fiduciaries adhere to when investing on behalf of a client . How do these requirements Impact Investment decision makings . Im going to ask you to address not only the letter of the law, but the spirit of the law that we are inquiring about today. Mr. Reyes thank you for the question, congressman. Ill try to be brief. Its very simple. Their duty is a fiduciary duty. Under laws like erisa it is the highest of all duties that one can owe to another in a fiduciary relationship. That duty requires them investing assets on behalf of others to maximize shareholder value. To maximize return back to the shareholder. Its as simple as that. That has been the rule, the prime directive, if you will, for generations. It served our market and nation well. Mr. Higgins how would you assess for the committee and for americans viewing this hearing, how would you assess attorney general reyes the performance of e. S. G. Investment versus traditional investment . Mr. Reyes i believe there are a number of studies that show that e. S. G. Funds have globally underperformed. So my data contradicts the data that we saw earlier from the ranking member. If i recall, and there are multiple studies, ill point to one, over the past five years global e. S. G. Funds have underperformed the broader phaebgts by more than 250 basis points per year, an average 6. 3 return compared with an 8. 9 return. In other words, an investor who puts 10,000 into an average global e. S. G. Fund in 2017 would have about 13,500 today. Compared with 15,250 investment in the broader markets. Thats one example from one study. Some Market Research that demonstrates that e. S. G. Is not necessarily a good bet. That Asset Managers should be investing in the best interests of their beneficiaries or the shareholders, not for a prescribed outcome thats dictated by these horizontal agreements and pushed and pressured by organizations like nzam and Climate Action 100. Mr. Higgins i thank general reyes for his clarification. I yield. Mr. Comer the chair recognizes the ranking member. Mr. Raskin thank you, mr. Chairman. Mr. Freichs, you say e. S. G. Is data. Some people call it e. S. G. Some call it responsible investing. Some people just call it exercise of fiduciary obligations. You are saying whats under attack is data. How could more data hurt . Mr. Freichs it cannot. What we need for investors to make good decisions. I liken this to the tax estate that would proscribe Asset Managers providing this data for us. Making us pick up Fantasy Football Team without knowing the players weights, injury status, track record. You cant make good decisions without useful pertinent information. And thats what e. S. G. Is. Mr. Raskin go into a time machine for a second. How does your job differ from someone who was the treasurer of illinois 50 years ago . Back in those days it seemed like it would be simple if you were trying to do the valuation for an auto company, how many autos are pumped out every year and number of manhours that go into it. How is the valuation of Companies Different today in 2023 than it was 50 years ago. Mr. Freichs the nature of value in the s p 500 has changed doctor mat dramatically in the last 50 years. 70 to 80 was intangible assets like cars, paper, pencils. And you could do an analysis depending on how many acres of forest you have under contract. You could see how many cars and pencils you could produce. And reach a value. Today the s p 500 has about 80 of the value in things like brands. Intellectual property. Those things are subject to different risks than those companies 50 years ago. We are just trying to guard against those risks. A company like google is not worth how much it is today because the number of the number of data they have. Its base the on reputation. Ale is not worth 1 trillion because of the number of i phones they sell but their reputation. Those are susceptible to social and governance risks. Mr. Raskin some of the disagreement here is about facts. I appreciate what attorney general reyes. He made the claim that e. S. G. Informed investments do more poorly than the Standard Poors. Our data is cleatly different from that showing its been overperforming. I would like your comments on that. Then i would like you to comment on this. Lets say utah sees it differently than illinois. Is there any problem with you pursuing the Investment Strategy you want and utah pursuing the one they want . Mr. Freichs investing is not easy. If someone doesnt want to look at this data, thats fine. They have that freedom. Nothing in e. S. G. Proscribes someone has to consider these sources. I would say they are not fulfilling their fiduciary duty if they didnt, but they have that right. I would cite other studies like new york study Stearns School of business, a metta study, multiple academic studies, looked at 245 individual studies on e. S. G. And Financial Performance. The study found a positive relationship between e. S. G. And Financial Performance for 58 of those studies. Only 8 showed a negative relationship. You can pick and choose. Any Investment Strategy will have quarters where it performs better than others. Overtime e. S. G. Has been a good set of data to make us better investments. Mr. Raskin you make that judgment as a financial expert who has a fiduciary duty to everybody in illinois . Mr. Frerichs the peurbs of those funds. I dont have a fiduciary duty to the oil and gas industry. Mr. Raskin you have one to maximize the returns. What you are saying is you want more information like somebody says this Perdue Company just got 57 in the last quarter. What about saying well, thats all that you could do at that point. You cant look at whether or not they are trying to get people addicted to drugs because that would be too woke. Mr. Frerichs if you look at the financial returns they showed themselves to be a profitable company. We wanted to know more because there are risks associated with selling highly addictive drugs. Mr. Raskin a real case. Mr. Frerich litigation risks, they took a company that was very profitable for a long time and bankrupted it. Mr. Raskin final question. Why shouldnt congress say, well, you know what, we are the house of representatives. The antie. S. G. People we are in control. We are going to stop states like illinois from looking at all the data. Whats wrong with that . Mr. Frerichs thats what some states are doing. Its costing those states not insignificant ants of money. The state of indiana their Pension System said it will cost an initial 6. 7 billion to cleat with the law. The state of kansas, 3. 6 billion. The state of kentucky, kentucky Pension System, said if forced to comply with their states antie. S. G. L. , they would not mr. Raskin they would rather be broke than woke. I yield back. Mr. Comer the chair recognizes the mr. Gosar of arizona for five minutes. Mr. Gosar attorney general reyes you heard the comment about science. This is about data. Can you dispute that . Mr. Reyes thank you. A couple of things. I want to comment on. I think my colleague mentioned that more data is all good, right. More data cannot hurt. I disagree with that because i think there can be bad data if it distraction or in some cases distorts the import and focus of what fiduciaries should be solely laser focused on. If its not benign data an example, Standard Poors issued e. S. G. Indicators alongside the creditworthiness for states. State like utah that has a triplea credit rating, the Standard Poors would point out in one instance the issue of drought without taking into consideration a whole other host of mitigating factors that utah has, antidrought measures. By itself, without the context, Standard Poors all of a sudden makes it look like the most important factor is not utahs creditworthiness over a long history, triplea credit rating, but one particular factor of drought. In that instance it illustrates my point of distortion. My colleague used the fantasy football aalcy and all data is good data. I guess in kind of a money ball sense. Again, i would take issue with that. If you use football as an example, if all of a sudden we started crowning the super bowl champion not by who scored the most points in the game but by who had the most green arena or who had the most environmentally friendly equipment, i think that data would be destructive. I think thats something that is not necessarily the indicator that we would we are looking for in this instance. Again, i again, i want to point out were contesting the process and you can have all the data in the world but if that data is driven to one particular outcome and its predetermined outcome and there is a cabal of players that are pushing toward that one outcome then that is window dressing to achieve that particular outcome. It is manipulated, would you give me that . Mr. Reyes i want to quote from a which has 59 trillion a. U. M. , assets under management, and this commitment is that its consistent, its ambitious for all assets under management to achieve net zero emissions by 2050 or sooner. Thats all assets. It says this, the transition to net zero would be the biggest transformation in economic history. To be able to transition to net zero is extremely powerful. Without our industry on board, the goals set out in the Paris Agreement would be difficult to meet. I could read chapter and verse. This demonstrates the concerted effort by all these industries to push a particular outcome regardless of what the daya may or may not data may or may not mr. Gosar an article from medium in 2021 that e. S. G. Investing, quote, provided for the opportunity for a bump in what were otherwise plummeting fees as competition had grown in recent years. Maybe if we looked at this, maybe if we look if he fisher investment. Fisher investment says our clients do better, we do better, instead of having these commissions on here. Do you think thats an opportunity to get things right . Mr. Reyes i would i definitely think thats an opportunity, congressman. And let me also mention something that was said. Just because it was not mandated i believe thats a reference this data, youre not forced to look at it. Just because its not mandated does not make it any more legal. You know, if its allowed, again, its data that, you know, distracts from a fiduciarys responsibility. Mr. Gosar you brought up ferc in regards to energy. So are you aware we were dangerously close to having a nagswide blackout earlier this year . And what did that play in that investment portfolio in regards to where we get our energy, internate versus internet versus base load . Mr. Reyes that effort to transition to cleaner energy is happening so fast, too fast that would have catastrophic effects on reliability and security of our elect trick grid. Mr. Gosar outpacing, outpushing our science and you have to have dependable science thats peerreviewed and repeatable. Thank you very much. I yield back. Chair comer the gentleman yields back. The chair recognizes ms. Ocasiocortez from new york. Ms. Ocasiocortez mr. Frerichs, if you could describe your job to a lay person, what is it . Mr. Frerichs to maximize returns to the designate of new york and our beneficiaries. Ms. Ocasiocortez and it is mr. Frerichs participants in Retirement Savings plans. Ms. Ocasiocortez those saving for college and retirement and who want to make sure they can put their dollar in a longterm investment that is stable, correct . Mr. Frerichs most people put their money in and expect not to look at the next quarter but look at the next quarter century. Ms. Ocasiocortez and thats a distinction between what we see sometimes on wall street or other shortterm investment where you really just want to look at whats going to make you money by the end of the year or end of the quarter, correct . Mr. Frerichs a c. E. O. Might hit a bonus for the next quarterly profit report. We want them to be profitable for the next 10 or 20 years because thats what families saving for college and people saving for retirement care about. Ms. Ocasiocortez in the course of your work, have you noticed that shortterm profitseeking behavior is not always consistent with longterm returns for everyday people . Mr. Frerichs correct. Perdue pharma, when they sold highly addicted drugs to americans they made money hand over fist. Its a great model to sell addictive money to people. When they start dying off, their relatives can engage in class action lawsuits that sinks that company or a railroad company, we can make more money by cutting staff by 30 . We can add more cars to the rail to make more money. And we dont spend time moving the cars around to distribute load. And then when that railroad has a derailment in ohio, it costs that company real dollars. It costs investors, shareholders and beneficiaries. Ms. Ocasiocortez its interesting you bring that up, mr. Frerichs. I think what were seeing is the other side of the aisle is making the argument here we should just look at the Balance Sheets, the shortterm returns and the shortterm investments in order to make longterm financial decisions. But the irony of that is that this committee, right now, and in the past has been charged with investigating companies that have abused the public by deliberately leaving critical information off those Balance Sheets. Youve seen that in your work, havent you, mr. Frerichs . Mr. Frerichs we have all seen it. There is bad data that sunken are on. It has nothing to do with eg e. S. G. You can look at bad data. Its the job of the investor to sort through that data. Ms. Ocasiocortez we just lived through that with f. P. X. We went through a multiinstallment investigation of duponts poisoning with respect to pfas in waters. Veteran communities, those that live around airports, etc. Dealing with cancer with help from the Balance Sheets. The Train Derailment in east palestine, those communities are struggling to access information that this company is hiding because it is not necessary to put on their Balance Sheets. Right now we are investigating avid for baby abbott for baby formula and the issues happening with infants dying in baby formula and that, too, was kept off Balance Sheets but also had Financial Impacts on the performances of those companies. They had to take that production offline. So the argument here is that our attorney that our our Investment Managers in different states should not take this information into account when making Investment Decisions for the public. Mr. Frerichs, can you really do your job if youre just looking at shortterm returns if you if your job is for the longterm Financial Health of people saving for college and retirement . Mr. Frerichs no. As a fiduciary for families saving for college, for people saving for their retirement, you know, they dont really care so much if a company is profitable next quarter. They care if it is profitable for the next 10, 20 years, quarter century. Ms. Ocasiocortez if we talk about where this push is coming from, why now, why is this happening . Mr. Frerichs this is happening because the nature of value in companies changed. We still do traditional Financial Analysis but we layer on another level of analysis to deal with these risks and they are material. They may deal with human capital. They may deal with workers. They may deal with the environment but they have realworld conis he sequences on the consequences on the bottom line. If we dont have access to that, its like investing with a blindfold on. Ms. Ocasiocortez thank you. I yield back. Chair comer the chair recognizes the gentleman from utah, mr. Armstrong. Mr. Armstrong thank you. A lot of the testimony brings up the problems of e. S. G. And the world of finance. Americans rely on a sophisticated Financial Investment system every day to plan for their future. Yet, the complexities of this system allow e. S. G. Causes to take precedent over most important thing of all, which is the bottom dollar. The purpose of investments is to grow our financial security, not shrink it. As you and my colleagues pointed out, investments in e. S. G. Funds does not bring higher returns. Id like to focus on focus a little bit on what proxy advisories currently have and how congress can ensure economic interest legally take precedent. I got the two different sides of glasses. Mr. Marshall, in a few sentences, can you talk to me a little bit and define how proxy advisors and voting . Mr. Marshall youve seen my colleagues reach out to the two proxy firms to be critical of the nature of doing business. What is a fiduciary and what is that fiduciary responsibility to those hardearned americans who have given their money to do investing . Proxy advisors are acting outside of the direct directive of those particular investors but instead are making their own independent value judgments about how they vote with regard to certain shareholder initiatives. Clearly, they are connected through various alliances to not only deal with Global Energy policy but also a set of preferred societial values. We see various shareholder initiatives of those that dont relate to the bottom line, dont relate to those particular investors then theyre acting outside the scope of their responsibilities and breaking fiduciary duties. Mr. Armstrong should congress consider restricting robo voting . Mr. Reyes it has givenl more power given more power to the due only which is i. S. S. And glass lewis. Thats part of what we would ask you, congressman, to look at with regard to proxy voting. The market for proxy Advisory Firms, as i mentioned and general marshall mentioned, is dominated by two players. I. S. S. And glass lewis. And their combined market share is approximately 97 . So youre looking at predominant Market Players who influence many of the Institutional Advisors and Asset Managers for whom they provide supposedly objective advice for a study has shown that a significant number of Institutional Investors simply follow the voting advice of proxy voters. Its like automatic straightticket voting. Its common sense but proxy Advisory Firms should have objective advice related to maximizing shares of companies that is subject to shareholder proposals and board elections. Unfortunately, for these two particular advisors, they, again, have very public, purposeful statements about what their end goals and objectives are, including retiring coal plants, including transitioning away from fossil fuels and getting to net zero paris 2050 goals. Its difficult to see and to imagine that they can be entirely neutral and provide objective opinions for those for whom theyre serving when they have such strongly stated goals and when they start every shareholder vote, i think one estimate was they have 38 or so of the votes already locked in. And so its very difficult to overcome their predisposed decisionmaking process. Those are all issues that we would like for you to take up in a further hearing with regard to proxy voting. Mr. Armstrong and mr. Marshall, if they are not acting in the best interest of their shareholders, what current mechanisms are in place to hold them accountable . And what should be accountable . Mr. Marshall one thing that exists is under our Consumer Protection laws. The trade practices act. One thing youve seen already is republican attorneys general have been active on the investigative side using both our Consumer Protection laws as well as the antitrust laws. Multiple investigations are pending and we have the opportunity to report back on those investigations. But as well, i think general reyes has outlined for this committee various ways this body can rein in what we believe is an unlawful practice. Mr. Armstrong i appreciate the fact that sometimes you can more quickly than we can. With that i yield back. Chair comer the chair recognizes ms. Bush from missouri for five minutes. Ms. Bush thank you, mr. Chairman. St. Louis and i are here today for a timely and important hearing to defend the planet itself. The acronym e. S. G. Has been used so much today already that id like to remind everyone what it stands for. Environmental, social, and Corporate Governance. The relationship between activities like giant corporations like microsoft, apple, and ebay, have an immeasurable impact on our society and on our environment. By now we all know that the health of our planet is fleeting. All you have to do is step outside, feel the seasons getting shorter and the temperatures getting higher. You just have to turn on the news to see the latest Natural Disaster devastating communities. You just have to listen to the scientists and climate experts who are telling us point blank that it is now or never. Act today or wish you had yesterday. My hometown of st. Louis ranks among the highest across the country in rates of asthma, with rates significantly higher for black residents than white residents. E. S. G. Principles are the bare minimum corporations can abide by to protect the communities that serve as their domestic headquarters in cities like st. Louis. The cost of doing business should not be a lifetime of pollution for small towns and cities across this country. Mr. Frerichs, do republican attacks on responsible investing practices actually increase the waste and mismanagement of taxpayer dollars, yes or no . And if so, how . Mr. Frerichs i think attacks that limit our ability to consider all factors to have access to data crosss us. And this has costs us. And this has been documented in other states. I think there is a misunderstanding what proxy advising firms do. The secret right there is the word advisory. They dont vote make these votes. The fiduciaries make these votes and if a fiduciary decides to just turn it all over to someone else, thats their choice, but a good fiduciary will have their advice and other sources of information. Were part of several coalitions we get information from. The example i like to use, were trying to get a good, clear picture of these corporations and their profitability over the long term. Now, you notice i wear glasses. I didnt always wear glasses. But the nature of my eyes changed over the last 30 years. I had to take steps to see better. When i went to go see an optometrist, they gave me a choice of two different lenses and said, which helps you see better . E. S. G. Are different lenses to see. Ok, first lens helps me see better. Eventually, after looking through several different lenses well get a much clearer picture. Thats what e. S. G. Data does. It helps us have a better picture about the longterm profitability of these companies. Ms. Bush thank you for that. I ask unanimous consent to submit into the record a study by Wharton Business School perspective daniel and ivan on the cost of the 2021 texas law to limit responsible investing. Chair comer without objection, so ordered. Ms. Bush thank you. Mr. Frerichs, could you briefly summarize the findings of this analysis for us . Mr. Frerichs back in 2021, the state of texas passed legislation limiting the number of firms they can use for debt issuance and because they limit it to the largest debt issuers, there is less competition. I find this difficult i am the one defending the free market and the ability to have competition and access to data and for shareholders to have rights. Because i think i heard earlier someone mention the asset owners who own utility stocks are telling them what to do as if its a bad thing. They are owners of these companies. What they found is by limiting competition it was costing the taxpayers of the state of texas an additional 300 million to 500 million a year. Ms. Bush thank you for lending your expertise. Long labor unions have fought long and hard to ensure large corporations and bad actors are being held responsible for harming workers. Workers should be able to determine if their state Pension Funds are being invested responsibly and e. S. G. Principals are an important first step. Now unions are on the frontlines of the fight to hold corporations accountable for their continued pollution of our communities. Whether is righting for paid sick leave, livable wages, Workplace Safety standards and now e. S. G. Principles. We must support strong government regulations and oversight into all activities of large corporations. The federal government has an obligation to provide resources and solutions to the Climate Crisis at every opportunity. Congress must ensure that with each piece of legislation we put forth that there is some component that addresses the Climate Crisis. Thank you and i yield back. Chair comer the chair recognizes mr. Grothman from wisconsin for five minutes. Mr. Grothman sure. Mr. Marshall, can you give some examples of decisions that a business would be kind of mussled into doing because of strong e. S. G. Sort of policies being implemented by, say, major Pension Funds . Mr. Marshall let me just speak to specific examples in alabama that we have concerns about. The agriculture industry is obviously very important to us. One of the things being targeted, for example, is farmers use certain types of fertilizer. How it is they use their land itself and the products they use to be able to produce what food goes onto the tables of families across the country. So imagine a farmer is dealing with a member of the Net Zero Insurance Alliance who comes to their farm and says as part of our underwriting we think you should be able to change the fertilizer youre using, change your Land Management or else we wont make it cost prohibitive. Mr. Grothman could you see a situation in, say, a bank is kind of mussled into giving out more muscled into giving out more loans to people who havent saved money, for example . Mr. Marshall congressman, we can cannot only see that but others. They boycott Certain Industries as well as limits funding of certain projects so that not only could we see a bank coerced to lend in ways they wouldnt previously but also see the exact opposite and that is to keep capital from other industries that are suddenly disfavored. Mr. Grothman ok. And that could be both individuals who perhaps have saved a lot of money, maybe we dont want to give them loans as much. We know recently we had situations on a nationwide level in which we tried to penalize people who have down payments for things. Will this, perhaps, effect how people who people hire . Like right now, there are certain disfavored groups in society. People dont like men. People dont like people of european background, that sort of thing. Could this be something where youre encouraging businesses not to hire or promote people or have on their board of directors people from unfavored groups by people who view people as a group and not as an individual . Mr. Marshall and a concern about hostile workplace environments. There is a push by e. S. G. To take policy decisions about societal issues taking place today. If you are an employee of a Certain Company that believes differently than that corporation has taken, taken as a result of being bullied by e. S. G. Proponents than that mr. Grothman give me an example. Mr. Marshall sure. Lets say they take a position on abortion and they believe abortion should be lawful and yet theres fundamental employees at that company who believe the exact opposite. Number one, theyre going to be stigmatized if they express their particular views but also the concern is whether or not they are going to be denied opportunities for employment and advancement. Mr. Grothman let me share the wealth here, mr. Reyes. Would that result of people being discriminated against, say, for a place on a board of directors based on political viewpoints . Mr. Reyes yes. And thats been stated by these organizations. Theyre not shy about it. Theyre very forth right and said we will oppose and we will not support directors with certain social or environmental backgrounds. Mr. Grothman what type of potential directors would be hated by this group . Mr. Reyes again, any number of them who dont support, for example, on the social side, Racial Discrimination audits. Ill give you an example. There was a travelers insurance case where a group of activist shareholders, i think it was trillium group, forced a shareholder vote on on an audit that they demanded which was a racial profiling audit that would require Travelers Insurance Company to potentially violate state laws in numerous states if the resolution passed. Mr. Grothman so these are the type of people that judge people where their greatgreatgrandparents came from. Mr. Reyes what they were supporting actually supported antidiscrimination laws. So mr. Grothman wow. And as a result, Companies May have to or will feel pressured to hire people based on these i call it ancestral criteria, is that right . Mr. Reyes i think thats a fair assumption, congressman. Mr. Grothman ok. Thank you very much. Chair comer the chair recognizes ms. Stansbury from new mexico for five minutes. Ms. Stansbury thank you, mr. Chairman. As a social scientist who worked on climate and sustainability issues for many years, in fact, all of my career, i actually welcome the discussion today on sustainable investing, as we know its crucial to the future of our planet and also our economy. But obviously, thats not what this hearing is actually about. Ive watched and listened today and seen as this hearing has evolved to the crusade in political culture wars. This committees precious time is yet airing another dark money funded, conspiracyladen attack on American Freedom. Im surprised to see in this case its an attack on the market itself. Its amazing to me to see the kinds of attacks weve seen on American Freedom by the majority. Attacks on our bodies, banning books, and now were talking about banning the way that businesses are able to invest their own capital and public bodies. But whats especially amazing about this is how radically outoftouch out of touch it is with the american public. And in fact, whats particularly insane about these bans on e. S. G. Is how out of touch they are with voters themselves, including Republican Voters. And mr. Marshall, i know youve been at the forefront of this effort but i want to ask you. Are you aware that the majority of americans and Republican Voters are actually opposed to e. S. G. Restrictions . Mr. Marshall i can tell you that ive had multiple comments from individuals throughout my state, five million almost alabamans that i represent. Mr. Stansbury thank you, mr. Marshall. I am going to direct your attention to this chart behind me. A recent poll released in politico show that most americans are opposed to restrictions on e. S. G. In fact, 63 of American Voters overall and over 70 of Republican Voters, 70 of Republican Voters are actually opposed to restrictions on e. S. G. But its not just the public. Its american businesses as well. Corporations, investment firms. Mr. Marshall, are you aware that the vast majority of american businesses are also opposed to these restrictions . Mr. Marshall congressman, would you like me to answer the first question you asked me . Ms. Stansbury are you aware that a vast majority of businesses mr. Marshall i will answer the first question. Ms. Stansbury fortune, forbes, the Washington Post recently published articles warning americans about the recent attacks on e. S. G. And explaining why they are bad for business. Now, lets talk about why theyre opposed. Because profitability, fundamentally depends on mass management. Mr. Frerichs, you know this because you are an Asset Management. And Corporate America understands the real and significant risks posed by Global Climate change and the other social and environmental factors that are presented as part of e. S. G. Factors and data as theyre presented in investing. So my question is why on earth is the g. O. P. Waging a war on e. S. G. , especially when its so completely unpopular with american corporations, the market, investors, American Voters . In fact, 19 states have actually moved under extreme governors and state officials to try to ban e. S. G. Investing. Were talking about legislation, and a very lawsuit were discussing today. My question is, why is this happening . I think, mr. Frerichs, as you indicated i think in your testimony, we have to follow the money. And the reality is, this is a wellcoordinated and political attack. Is that not true, mr. Frerichs . Mr. Frerichs it would seem the fossil fuel industry is leading the charge here. We had talks about how banks are muscling companies. We have seen that. We have seen banks being muscled. The legislation in texas is muscling banks to invest in the fossil fuel industry. Banks like to be diversified. And if they decided they wanted to invest in renewable resources, like biofuels from iowa or wind turbine blades or solar panels being installed in arizona, they would be punished for that. Thats the real shame here. Ms. Stansbury so e. S. G. Has been another boggy man in the culture wars. This we are sitting here in the very weeks that we are debating a potential default on the american debt ceiling, and yet, the g. O. P. Is claiming this is about fiscal responsibility and fiduciary responsibility to shareholders and the public. That is not what this is about. It is a wellfunded, dark moneyfunded culture war attack not only on the American Economy but the American People. And with in a i yield back and with that i yield back. Chair comer the gentlewoman yields back her time. The gentlewoman from colorado is recognized for five minutes. Mrs. Boebert thank you, mr. Chairman. And thank you to our panelists for being here today. As we have heard today, there are numerous concerns related to socalled environmental, social, and governance policies being indont rin ated into accounts by woke Asset Managers. The hearing today will help us better understand what congress can do so that activist stakeholders will not encourage woke corporate activism as we have seen recently with anheuserbusch, disney, and even nike. Because as we all know around here, when you go woke, you go broke. So attorney general reyes, for background, could you ewill be rate on could you elaborate on how Asset Managers can violate their duties by signing e. S. G. Pledges . Mr. Reyes sure, there are a number of ways. There are federal laws that could be implicated. There are state laws including state Consumer Protection laws, state securities laws. There are common law contractual agreements that fiduciaries can violate. All of those different laws come into play. And one of the reasons why we filed a Law Enforcement against the current Administrations Department of labor rule, weakening the fiduciary role and the duty and responsibility of fiduciaries is because we think it, among other things, violates major questions, doctrines, violates the a. P. A. , the administrative procedures act. All of those are ways why were concerned, congresswoman. When you hold yourselves out as being objective and you represent to your customers and your shareholders that you are being objective, then you must live up to that and not have a predisposed, predetermined end goal in mind. Ill make one comment. My colleague and my friend, the good treasurer mentioned proxy advisors dont vote the shares. Hes right. But in many ways theyre de facto voters because many of those fiduciaries have so many thousands of different investments that they rely almost solely on the proxy advisors. When the fiduciaries are part of the same horizontal agreements as the proxy advisors, theyre all part of one in the same scheme, there really is no free market in that. They keep talking about free market. Thats why were here. There is nothing free about the arrangements. Mrs. Boebert you said horizontal now i am aware several state attorneys generals are investigating some include Jpmorgan Chase. What have those investigations found to date . Mr. Reyes not ready to disclose all of our findings yet. But i will say comfortably, enough that we are continuing our investigations. And we hope that you mrs. Boebert mr. Reyes, considering the Silicon Valley bank has collapsed and Jpmorgan Chase bought the bank, has there been any indication theres been any investment in e. S. G. Policies that that theres been while reestablishing the bank . Mr. Reyes there may be, but im not willing to comment on that based on our investigation. Mrs. Boebert thank you so much. Attorney general marshall, as the department of labor, under the Biden Administration has considered requiring fiduciaries to consider e. S. G. An employee Retirement Savings decision, several 401ks and thrift saving plans allow managers to use their Voting Rights on behalf of these retirement accounts. Black rock is primarily a leftwing activist fund that uses its status as a fiduciary for several Investment Funds to coerce companies into introducing these e. S. G. Politics into their retirement account savings. How can Congress Help ensure that these companies are not introducing e. S. G. Policies into their Investment Funds and instead are maximizing returns for future seniors that will need to live off of this money in these accounts . Mr. Marshall congresswoman, what we heard is how partisan this issue is. This body has demonstrated through the senate by attempting to overturn the new safe harbor rule under erisa saying it was an improper way to consider the investments for 152 million americans and their retirement accounts. This body can show whatty risa what erisa means for those individuals that invested in their accounts. Objective criteria, not subjective e. S. G. Criteria, are used for makes those decisions. Mrs. Boebert thank you very much for that suggested solution. Mr. Chair, i yield. Senator sessions the mr. Sessions thank you. I continue to be surprised by the position of my friends on the other side. Arent the values of free market, a, a fundamental view of their party . Environmental, social, and governance investing is one critical tool that businesses make financially smart investing. It has corporate models that are financially smart and socially good which is truly a winwin. One aspect of corporate models that is too often overlook is the governance and social strategies component. These strategies often center around diversity in the workforce, both at zbik tiff levels and throughout the broader industry. The inclusion of people of all backgrounds, especially those from marginalized communities, is an essential part of americas corporate success. We thrive as a nation when every one of us is empowered and has an opportunity to succeed. Ms. Brown Diverse Voices at the table make companies stronger and their products, goods, and services more inclusive and effective. According to a 2019 mckenzie analysis, companies in the top 1 4 tile for Ethnic Diversity on teams were 36 more tyke 36 more likely to have above average profitability. Another study showed that employees are 5. 4 more likely to want to continue working at a diverse company. Clearly, businesses have a moral obligation as well as a financial incentive to make sure there is a seat at the table for historically marginalized groups. But there is still so much work to be done. So secretary marshall or secretary reyes, do you know what percent of the 5,403 Board Members of fortune 500 companies are women of color . Mr. Marshall congresswoman, i do not. Ms. Brown the answer is 7 . Moving on, this year the Pew Research Center published a report on blackowned businesses in the United States which continue to face systemic structural barriers to equal opportunity including lack of investment. I hope you have a chance to read it. I ask unanimous consent that this be entered into the record. Mr. Sessions without objection. Ms. Brown secretary marshall or reyes, can you tell me how many are blackowned . Mr. Marshall congresswoman, i cannot. Mr. Reyes no, maam. Ms. Brown blackowned businesses make up only 3 of classifiable companies despied black despite black americans making up 12. 4 of the u. S. Population. Mr. Frerichs, in your experience as illinoiss top investor, how does diversity at all levels of a company help investors meet their fiduciary responsibilities and position themselves for success . Mr. Frerichs thank you very much for that question. The research has been fairly clear and this is not by a leftwing organization. Mckenzie is not a leftwing organization. Diversity is good for boards. I heard comments made earlier about discrimination against people of a certain ethnic background. There are plenty of white men serving on corporate boards. Majority are. Homogeneous boards outperform diverse boards. Its not just research. Its common sense. If you bring people from the same backgrounds, the same educational schools, same cultural backgrounds together, you are going to find a lot of group think. A good board does well when there is discussion and back and forth and differences of opinion. So diverse boards reduce group think and produce better results. Ms. Brown thank you. And i would say that that answer demonstrates the need for increased did versity both diversity both in corporations and throughout the sector. Pun ishg companies for these corporate choices have been an element of the republican platform from d. C. To disney. While they continue to face unique economic barriers, republicans oppose corporate freedom to implement strategies for social investment which even benefits the bottom line. In fact, the republican platform appears to center around taking away choice. The choice to promote diversity, equity, and inclusion. The choice of a woman to have control over her own body and the choice to read a book and live without the fear of gun violence. I urge my friends on the other side of the aisle to reconsider these misguided priorities. And with that, mr. Chairman, i yield back. The chair the chair recognizes the gentleman for five minutes. Under state laws, Asset Management puts their clients interests first. Its becoming increasingly clear that Asset Managers may have violated fiduciary duties through signing radical e. S. G. Pledges. Attorney general reyes and attorney general marshall, you, including allen wilson from south carolina, penned a letter to 53 Asset Managers. You said state and federal laws require they act as a fiduciary. In the best interest of their clients and exercising due care and loyalty. So today i want to take a quick look at the history of fiduciaries. Mr. Fry the bible says no one can serve two masters. A fiduciary is a character of a trustee with respect to the trust and confidence involved in it. And the scrupulous good faith and canter which it requires. 1727 English Trust Law holds a trustee owes a strict duty of loyalty and care so that they can never be there can never be any possibility of a conflict of interest under erisa. A person who apprentice Investment Advice proadvice that same advice for the plan participants. The history of fiduciary is not a new concept. Why are Asset Managers struggling with that duty . When someone vests their invests their money, they have the intention this money will grow and they will get a return on that investment. However, Asset Managers is throwing support of e. S. G. That is contrary to those have those holdings. Attorney general raze and mar reyes and marshall, achieving financial returns and e. S. G. Policy goals, can you outline that . Mr. Marshall clearly there is a conflict. One of the things i identified previously is the role of Pension Funds in states. We had the states of kentucky and louisiana in examining the question of fiduciary duty concluded that consideration of e. S. G. Factors would in fact violate state law. The laws in kentucky and louisiana are very similar to the laws throughout our country. Very similar to the way that this body has defined fiduciary under erisa. And it is identified as the sole interest duty of loyalty. Very specifically, the Michigan Supreme Court many years ago said that business corporations organized and carried out primary for the profit of stockholders. The role of Asset Managers is to maximize the return on that investment. Again, particularly for the hardworking americans who have invested their retirement dollars. Their concerns principally is whats going to be there when im done . Its not necessarily on some of the factors that are subjected with an e. S. G. But those objected factors that qualify to determine what investment should be recognized. Interestingly, my colleague from illinois referenced glasses. An optometrist had given him the glass prescription. Optometrist uses devices to objectively determine what your vision is to be able to make sure you have the right glasses, that youre not using the wrong ones. E. S. G. Criteria very differently are not objective, theyre subjective. One of the reasons is the rating agencies themselves can agree on what the factors should be and they also score individuals quite differently depending on the subjective view of those companies. One thing thats also clear, certain subjective e. S. G. Factors are in conflict. For example, lets take solar power. If you have a company you want to be able to score well because they converted to solar energy, we have to also recognize that solar energy is coming from materials that are manufactured in china where forced labor practices are not acceptable. Mr. Fry attorney general reyes, i want you to answer this one because i am crunch for time. Are Asset Managers required to tell those when they are in these pledges . That seems to be a problem. My understanding they do not have to disclose them. Are Asset Managers required to tell their clients when they enter into these e. S. G. Related pledges . Mr. Reyes not currently. That would be something that the trump rules, that the department of labor just changed previously required. If it was a tie and its an intricate answer but, yes, there had to be transparency and disclosure and an explanation. Those rules have now gone away because of the current administrations hostility against towards that. It would be advisable but theres not a requirement, per se. You could read into their fiduciary duty. I think complicitly there ought to be but right now theres no statutory duty. Mr. Fry thank you, mr. Chairman. I yield back. Chair comer the gentleman yields back. The chair recognizes ms. Porter from california for five minutes. Senator portman thank you ms. Porter thank you. Attorney general marshall, i think we can agree on something right at the outset. I think the United States should have the strongest possible capitalist economy that we can. Do you agree . Mr. Marshall i agree. Ms. Porter and capitalism is a lot like democracy. You get choices. And just like a democracy, lets you choose between different candidates who may have very different political views. Capitalism is supposed to let you choose between more than one product, service, or investment that meets your needs. Do you agree that choice is a fundamental premise of capitalism . Mr. Marshall i do not disagree. Ms. Porter do not agree. I will take that as agree. Mr. Marshall i will say it again. I will agree with you. Ms. Porter thank you. Mr. Marshall, when you buy a car, what criteria do you look at when you make your final decision . Mr. Marshall quality of the vehicle and the cost. Ms. Porter the car thats best for you may not be the best for me. I drive a minivan and you may not be caught dead in one. For all i know, you might be a tesla guy. Mr. Marshall i am a pickup guy. Ms. Porter i have constituents that buy lowemission vehicles. You may have constituents that may buy trucks they use for toeing or hauling. Towing or hauling. It is not different than when you invest in a company. You gather information to see if youre getting what you want as a consumer or in this case an investor. Mr. Marshall, what kind of information would an environmentally conscious investor be looking for . Lets assume these investors exist. What would they be looking for to make an investment that meets their needs . Mr. Marshall i couldnt answer that question for you. I dont know exactly how you define what you are talking about. Ms. Porter i think theyll look for information about what the companys policies are to mitigate Climate Change risk, how theyre addressing fluctuating energy costs that might be related to changes in market prices and availability of fossil fuels. They might be looking at how water shortages caused by drought my affect their business model. How supply chain interruptions caused by climate. There are Different Things they could look for. The point is investors want to know more than just dollar and cent disclosures when theyre making the decision to invest or buy. Maybe you dont. Maybe all you want to look at is the dollars and cents. But environmental, social, and governance disclosures give those investors the option to take that information into account. And its not just progressives. Plenty of conservatives have dumped their stock in disney or stopped buying because they think theyre too woke. Mr. Marshall, if a Company Became less woke based on market pressures, would you take legal action against them as a. G. . Mr. Marshall you have to give me a little bit more information to know whether or not we could. Ms. Porter if disney changed their policy on lgbtq americans, would you see them . If they changed their policy to fail to protect lgbtq americans, would you sue them . Mr. Marshall i think the analysis for us would not be necessarily that individual Company Changed its policy. The question is whether or not they were compelled to do so for otherwise unlawful reasons. Its one of the reasons why you see currently that there are active antitrust investigations involving multiple players on the e. S. G. Front, including Climate Action 100 and the can i finish please . Our evaluecation there is whether or not their actions incur corporations to make decisions that otherwise wouldnt be appropriate for them to make. Ms. Porter ok. So lets break this down. Its very important to be clear to the American People. The labor departments rule does not impose a mandate. It permits fiduciaries to consider e. S. G. Standards if they believe those considerations are prudent in their decisionmaking and what the information is they want to provide investors. Theres no mandate under the department of labor. And i think these antitrust concerns are at best misplaced. There is simply no evidence that there is a violation of the sherman act going on. Theres no evidence this is whats happening. It is up to each of these companies, so these initiatives are no different than other initiatives that corporations have that come together. They are private actors making their decisions. Its hard for people to suggest that black rock is some lefty communist organization. For crying out loud, black rock is about delivering value and in doing that they are looking at different kinds of propositions about value, including good governance, including the effect that Climate Change may have on their bottom line. Thats the whole point. This is about freedom. Thats what were talking about. Capitalism delivers freedom. And that happens when markets let People Choose what they want. Thats all that youre trying to block here. Youre trying to block people from looking at disclosures that they find valuable. If they dont find them valuable, dont look at them. I think capitalism is about choices. You heard you say you do, too, so i hope youll reconsider your policy. I yield back. Mr. Marshall chair comer you have an opportunity to respond. The chair recognizes mr. Palmer for five minutes. Mr. Palmer i thank the chairman. And i thank the witnesses for appearing today. Attorney general marshall, alabamas economy depends on robust industries agriculture, timber, energy, auto manufacturing, aircraft manufacturing. How would the e. S. G. Initiatives potentially harm the economy and impact consumers, not only in alabama but nationwide . Mr. Marshall i think first and foremost, congressman, is on energy prices. If you look whats driven inflation and whats hit americans in the pocketbook, including alabamans, its increase cost to energy. Part of that is decreased investment in what is currently producing the energy in our country itself. But beyond that, particularly, for example, within agriculture, it is going to be the attack on agriculture as it relates to their responsibility, according to the left for increased carbon emissions. Lets take, for example, our cattle industry. As you well know thats a significant portion of our agriculture economy. We also know from data that cows are the largest emitters of methane gas. Do we find farmers discriminate against in their banking relationships that impact their ability to do their job . Congressman, i dont think many in my state wont give up hamburger and put tofu on their grill. The question is whether or not we can produce the Food Products this country needs and be able to do it in a way we can make it affordable to americans. Ms. Palmer i dont think im willing to give up my pickup or many of my friends that drive pickup trucks want to do that either. I want to point out in this headlong rush in removing carbon from our society. Its insane. The very thing you have to build a renewable infrastructure, cement, steel, plastics. The majority of thats produced in china but it all requires enormous amounts of natural gas. But theres one other thing id like to point out. 83 of over 80 of the cost of fertilizer that is necessary for Food Production is natural gas. And if we eliminated natural gas from that process, it would cut the world Food Production in half. What were seeing with e. S. G. Driven investments i think is not only a threat to our economy, its a threat to our food supply, in many respects. But its also a huge help to china. I made this point this morning in a speech i gave that this headlong rush to renewables that europe engaged in created the energy crisis, not the war in ukraine. The war in ukraine exposed it. If they were to go 100 renewable they would no longer be reliant on russia or the United States or anybody else for natural gas but reliant on china. Thats one of the biggest concerns i have with this big push with e. S. G. This empowers china, would you agree with that . Mr. Marshall i do agree with that. Interestingly, if you look at the history of energy transformation, our country was driven by economic and the other is through technology. Its usually taken a century or more for that to take place. The current change is not driven by any action that this body has taken but instead its by global elites who believe there ought to be Global Energy policy. Not congress acting. Not those that are accountable to the people but in fact it is those outside of our country dictating what our policies should be. And it is benefitting china who by the way is not as tied in to the paris accord as many of our developed countries are. And it gives them an unfair competitive advantage over American Companies as well by access to cheap energy. Mr. Palmer as i pointed out in another hearing, chinas objective is not to save the planet from Climate Change. Chinas objective is to rule the planet as the worlds sole super power and want to do that by 2049. And we have this artificial target by achieving net zero by 2050. Under no engineering scenario or Technology Scenario is achievable. So now were getting down where e. S. G. Is not only a threat to our economy, its a threat to our National Security. Thats my opinion. I believe that as we continue to divest ourselves from our Hydrocarbon Infrastructure and go more towards renewables it will make us reliable to china to sustain our National Security . Would you agree . Mr. Marshall yeah. We should have learned from covid, relying on products outside the country when we needed them during the pandemic. Mr. Palmer mr. Chairman, i want to thank our excellent witnesses, particularly the gentleman from alabama. Chair comer thank you. The chair recognizes mr. Garcia from california for five minutes. Mr. Garcia thank you. I want to thank all of the witnesses for their service. For me i am not here to defend any Corporate Strategy or investment. I think most of the democrats and the democrats on this committee are really focused on supporting people and were not here to put working people above big corporations and companies we do know also want to consider certain goals that they have when theyre investing. Whether its because climate is obviously changing. Having an impact. Companies obviously prioritize diversity because america is actually more diverse. And it helps them do business in a diverse society. So these are decisions that make Financial Sense and i think corporations are making this all the time. I think we should also be honest what were doing here. I think the majority is clearly trying to score political points with some sort of panic around whatever wokism is. I am not even sure what wokism still is or how to actually describe it. We have many Business Leaders within the community that are criticizing this republican farright agenda thats ignoring Climate Change and really is not operating in any sort of reality. Some sort of fox news bubble ecosystem. So the far right wants revenge and want to revenge on corporations, on working people, on everybody. The interest campaign thats happening across this country and certainly here in this committee is also heavily orchestrated and wide reaching. E. S. G. Efforts have a lot of ties to dark money elsewhere across this country. I want to just give an example. I want to ask unanimous consent to submit a record for the record a february, 2023 article from the group documented. That describes an antie. S. G. Dinner during a Heritage Foundation meeting. If i could please have that article submitted for the record. Attending this dinner included an antiunion and antiquoteunquote, organization. Chair comer without objection, so ordered. Mr. Garcia what does this tell you about coordination between these antie. S. G. Attacks . Mr. Frerichs i think its not a surprise. We see it when letters are signed that theres someone behind it. Mr. Garcia also is a name that is familiar, and thats activist, leonard leo. We all know that leonard leo spent his career installing concerted justices to the Supreme Court in an effort to overturn roe v. Wade and so much other progress across this country. You may remember mr. Leo from recent press reports that have said he asked Kellyanne Conway and her polling firm to give jenny thomas, quote, another 25,000. He emphasized the paperwork should have no mention of