New US coalition demands right to invest responsibly 

April 13, 2023

A coalition of more than 300 investors and companies has urged US policymakers to protect their freedom to invest responsibly. 

The ‘Freedom to Invest’ coalition produced a statement arguing that investors must be free to consider all material financial risks and opportunities, including those related to climate change. 

The newly formed coalition was coordinated by the We Mean Business Coalition and Ceres, which is a non-profit focused on sustainability challenges in capital markets. 

The list of more than 300 signatories includes Franklin Templeton, which manages $1.5trn of assets, and California State Teachers’ Retirement System, the second-largest pension fund in the United States.  

The statement was produced to remind policymakers that introducing policies to limit responsible investing can be detrimental to the profitability of businesses.  

The signatories also highlighted the important role that considering climate-related risks plays in building a stronger and more resilient economy.  

The statement said: “Neglecting the robust economic benefits of the clean energy economy — and the substantial public and private investment opportunities that are necessary to achieve this shift — would represent a failure to build a stronger, more resilient U.S. economy.” 

As a result, policymakers must not prevent investors and businesses from considering all material financial risks, including the economic impact of the climate crisis, according to Freedom to Invest. 

The coalition also reiterated that the consideration of ESG factors is not political or ideological. 

The statement follows debates over whether investment decisions should be allowed to consider climate change and ESG factors, which was prompted by the Department of Labor’s new ESG rule. 

The rule was first introduced in November to allow plan fiduciaries to consider climate change in selecting investments. However, lawmakers approved a resolution to overturn the rule in March.  

Later in March, US President Joe Biden issued his first veto on the bill to invalidate the ESG rule.