ESG Investors ‘Shrill,’ ‘Self-righteous’ Says SEC Commissioner

In a tense line of questioning during the Securities and Exchange Commission’s oversight hearing, Rep. Katie Porter, D-Calif., confronted Republican Commissioner Hester Peirce on previously made remarks in which she called ESG investors “shrill” and “self-righteous.”

During Tuesday’s three-and-a-half-hour-long hearing, members of the House Financial Services Committee questioned the SEC’s five board members on various efforts and initiatives by the agency. In the last 10 minutes of the hearing, during a discussion about corporate disclosures, Porter demanded an explanation of Peirce’s comments and questioned whether the SEC shared those sentiments.

The exchange was as follows:

Porter: Commissioner Peirce, you’ve compared ESG disclosures to scarlet letters. In the vein of the high school novel, The Scarlet Letter, in which an unwed, pregnant woman named Hester is marked with a red letter ‘A’ for adulteress. You’ve said and I quote, ‘As with the scarlet ‘A’ the ESG letters over-simplify complicated facts.’ Do you remember making that comparison between ESG disclosures and The Scarlet Letter?

Peirce: I do.

Porter: You actually said, and this is colorful, ‘We ought to be wary of shrill cries from a crowd of self-appointed, self-righteous authorities even when all they are crying for is a label.’ So, in your opinion those who support ESG disclosures, the requirement that companies give investors information about, for instance, their environmental impact or their gender diversity – those people are shrill, self-appointed and self-righteous.

Commissioner Peirce, would you consider Commissioner Clayton to be shrill?

Peirce: Not at all.

Porter: Do you consider Commissioner Jackson to be self-righteous?

Peirce: Not at all.

Porter: Do you consider Commissioner Roisman to be self-appointed?

Peirce: Not at all. Not sure what —

Porter: Commissioner Clayton do you consider yourself to be shrill or self-righteous?

Clayton: I try not to be.

Porter: Would you call investors who request ESG disclosures to be shrill or self-righteous?

Clayton: … So, I don’t like to put a blanket on investors as group, but I believe that people who engage on this – they care.

Porter: They presumably want the information because they believe that it’s maybe useful to them.

Commissioner Clayton, do you believe that the letters ESG should actually stand for enabling shareholder graft as Commissioner Peirce said during a recent speech of the think tank? Graft, of course, being the advantage one gets from corruption.

Commissioner Clayton: No.

Porter: Thank you.

The conversation can be viewed by following the link below.

Capitalism doesn’t work if people can’t make informed decisions about where to put their money. I questioned a top official today who previously called supporters of corporate disclosure (of info like their environmental impact or gender diversity) “shrill” and “self-righteous.” pic.twitter.com/4OmGAvmdio

— Rep. Katie Porter (@RepKatiePorter) September 24, 2019

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