MAGA Republicans in the House are closing out the week with yet another partisan stunt hearing attacking environmental, social, and governance (ESG) investment strategies. Even though MAGA policies enacted at the state level to ban responsible investing have already cost taxpayers millions, Republicans on the House Financial Services Committee are desperate to reward deep-pocketed campaign contributors who stand to lose from responsible investing by inviting a slate of witnesses including two home construction industry insiders. As always, MAGA Republicans would rather pursue partisan stunts seeking to undermine responsible investing than address the real financial issues facing most Americans like inflation.
Environmental, Social, and Governance (ESG) Factors Are “In The Insurance Industry’s DNA. “While ESG is the bugbear of the GOP’s vision of “woke capitalism,” it has found a home in the insurance industry. “ESG is in the insurance industry’s DNA,” says Michael Leonard, chief economist and data scientist at the Insurance Information Institute, an assertion widely shared within the industry. “It would be very difficult,” he added, “for the insurance industry to insure in an economically viable and sustainable way without paying attention to environmental patterns.” Insurers identify and price risks, of which the most significant are the effects of climate change. “There is not an industry more directly affected when you think of the cost of fires and floods and droughts than the insurance industry,” writes Steven Rothstein of Ceres, a nonprofit advocacy group. In 2021 Swiss Reinsurance Company, among the world’s largest reinsurers, reported that “from 2010 to 2020, realized los[s]es have exceeded expectations in almost every year. Very likely, part of this gap can be attributed to trend effects due to climate change.” While controversy has arisen over ESG investing, Grant Foster, managing director of Aon Global Risk Consulting, notes “Investment is not the only reason to brush up on an organization’s ESG credentials; the ability to access the insurance markets is also increasingly reliant on ESG performance.” And insurers are gatekeepers to broader capital markets. Insurance is about managing risks, and insurers straddle a pair of them on the asset and liability sides of their balance sheets. As investors insurers manage large portfolios to defray the liabilities, they assume by underwriting the risks born[e] by their policyholders.” [NH Business Review, 3/24/23]
Witnesses
Alicia Huey is chair of the National Association of Home Builders (NAHB), having served on the NAHB Board of Directors for more than 15 years in various roles, including as vice chair and membership chair, while the organization donated millions of dollars to Republican candidates.
- The National Association of Home Builders (NAHB) Has Spent Millions On Republican Candidates During Huey’s Tenure. All told, the organization and its PAC have contributed more than $11.8 million dollars to federal Republican candidates since Huey joined the NAHB Board of Directors about fifteen years ago — nearly 73 percent of total contributions to federal contributions. During the 2022 midterm election cycle, the NAHB spent more than $1.5 million on federal Republican candidates – nearly 78 percent of all PAC contributions to federal candidates. The organization spent over $1.4 million on Republican candidates in 2020, more than $1.7 million in 2018, and over $1.8 million in 2016.
- The National Association of Home Builders (NAHB) Has Lobbied Extensively For Long-Term, Federally-Funded Flood Insurance. The NAHB has lobbied on supporting the National Flood Insurance Program and improving the affordability of homeowner flood insurance this year. The NAHB website states that the organization has long supported the program and “supports competition in the marketplace, but only if it does not negatively affect the affordability and availability of the NFIP.” The NAHB has spent more than $10.5 million in lobbying since 2020 alone, and one of their newest lobbyists is Ben Arcuri, a right-wing activist with experience working for Ron DeSantis, the Heritage Foundation, and an anti-union organization who lobbies for the Republican Study Committee according to the organization’s disclosure statements.
- Huey Named “Excessively Burdensome Regulations” As A “Top Concern” For American Home Building In 2023, But Did Not Mention Risk Mitigation. “Excessively burdensome regulations are going to be a top concern this year. Two years ago, our economists found that regulations imposed by [the] government—at all levels—account for 23.8% of the final price of a new single-family home built for sale, or $93,000 on average. It is hard to build an affordable home when facing these kinds of costs. […] We’re working with policymakers at the local, state, and federal levels to make sure they understand the impact of regulations on the cost of a home. But the Biden administration is pushing for new, more stringent rules on a variety of issues.” [Builder, 2/17/23]
- Huey Is A Repeat Witness. This is not the first time Huey has appeared before Congress to testify. In June 2022, she appeared before the House Ways & Means committee to testify in a hearing on women in the workforce and the economy.
Bill Boor is President & CEO of Cavco Industries, an Arizona-based shelter manufacturing company, and was called to testify before the committee on behalf of the Manufactured Housing Institute (MHI).
Since Becoming CEO of Cavco Industries, Boor Has Given Thousands of Dollars To The Manufactured Housing Institute’s PAC Supporting Primarily Republican Candidates. Boor is a top donor to the Manufactured Housing Institute’s PAC, contributing $2,000 in 2022 and $5,000 in 2020. In those two years alone, the PAC has contributed $304,000 to federal Republican candidates – nearly 60 percent of the organization’s total contributions to federal candidates.
Boor Has Personally Endorsed ESG Initiatives At Cavco Industries. “Rather than trying to satisfy all of those outside constituencies, we deliberately grounded ourselves in the principle that our Corporate Responsibility journey is about the company we are today and the company we are becoming. We defined our self-chosen priorities within the context of all that we do and how we define our success. Under this principle, Corporate Responsibility is not separable from operating and growing the business. It is an integral component of what makes Cavco successful. The priorities that emerged in our inaugural 2021 corporate responsibility report (CRR) and those that continued to develop in the 2022 CRR are the ones we believe are right to focus our energies on and those that will improve us as a company dedicated to making a difference. Every employee at Cavco is involved in the important work of building, selling, funding and insuring affordable homes with the highest quality, efficiency and durability on the market. We take great pride in our work because these are the homes that provide stability, security and wealth-building opportunities for families across the country. […] Anything less would be inconsistent with our values.” [Cavco Industries, Accessed 7/13/23]