Your monthly support provides voters the knowledge they need to make confident decisions at the polls. Donate today.
Economy and Society: October 22, 2025
In this week’s edition of Economy and Society:
- Regulators withdraw climate-risk principles for large banks
- U.S. investors show waning enthusiasm for ESG
- Glass Lewis ends standardized proxy vote recommendations
- BlackRock and Exxon form coalition to overhaul carbon accounting
- Shareholders urge companies to cut ties with civil rights organization
In Washington, D.C., and around the world
Regulators withdraw climate-risk principles for large banks
What’s the story?
On Oct. 9, the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) announced they will withdraw the Principles for Climate-Related Financial Risk Management for Large Financial Institutions. The principles were issued in 2023 to help large banks assess and manage climate-related financial risks. The agencies said they “do not believe principles for managing climate-related financial risk are necessary,” adding that institutions should instead focus on identifying and managing material financial risks through existing supervisory expectations.
Why does it matter?
The withdrawal marks a reversal from climate-risk guidance under the Biden administration. Regulators indicated that emphasizing climate could distract from broader financial risk management, signaling a renewed focus on traditional prudential oversight.
What’s the background?
The principles, finalized in October 2023 under the Biden administration, were issued to help large banks manage climate-related financial risks such as extreme weather, energy-transition pressures, and regulatory change. Regulators said the policy aimed to ensure institutions considered long-term physical and transition risks within existing safety and soundness frameworks.
U.S. investors show waning enthusiasm for ESG
What’s the story?
Morningstar’s 2025 Voice of the Asset Owners Survey found that enthusiasm for environmental, social, and governance (ESG) investing is increasing globally but has weakened in the United States and Australia. The survey shows that about 34% of U.S. asset owners believe incorporating ESG factors aligns with their fiduciary duties, down from 50% in 2024.
Why does it matter?
The data show a widening divide between global and U.S. investors. While support for ESG integration continues to rise internationally, especially in Europe and Asia, enthusiasm in the United States has declined amid political pushback from Republican lawmakers, state officials, and some industry groups. This divergence highlights how ESG considerations are becoming a global norm even as U.S. markets move in the opposite direction.
What’s the background?
U.S. enthusiasm has declined amid political opposition and changing regulatory priorities under the Trump administration. Republican-led states and federal agencies have challenged ESG’s role in investing, arguing that it politicizes finance and conflicts with fiduciary duties, contributing to a broader cooling of ESG engagement among U.S. investors even as international adoption accelerates.
On Wall Street and in the private sector
Glass Lewis ends standardized proxy vote recommendations
What’s the story?
Glass Lewis, one of the two largest U.S. proxy advisory firms, announced last week that it will discontinue its long-standing house or benchmark voting recommendations and instead focus on customized advisory services for institutional investors. The firm said that increasing political scrutiny of ESG issues—including Texas attorney general's investigations —and widening regional divides over ESG priorities had made one-size-fits-all recommendations impractical.
Why does it matter?
The move underscores how the politicization of ESG investing in the U.S. is reshaping corporate governance practices. Proxy advisors like Glass Lewis and Institutional Shareholder Services (ISS) have faced growing pressure from states accusing them of advancing climate or diversity agendas.
What’s the background?
Texas enacted SB 2337 in May, establishing new disclosure and transparency requirements for proxy advisory firms. The law requires proxy advisors to disclose when their voting recommendations incorporate nonfinancial factors, including ESG or diversity goals, and to notify the Texas attorney general if they issue conflicting advice to clients. Violations are classified as deceptive trade practices enforceable under Texas law.
BlackRock and Exxon form coalition to overhaul carbon accounting
What’s the story?
On Oct. 20, 2025, BlackRock’s Global Infrastructure Partners, Exxon Mobil, and other major firms announced the launch of a coalition called Carbon Measures. The group plans to develop a new global framework for measuring and reporting carbon emissions that addresses issues like double-counting and inconsistent data standards across existing systems.
Why does it matter?
The initiative reflects growing pressure from both investors and regulators for more consistent and transparent carbon data. Current carbon-accounting systems often produce overlapping or incomplete figures. Inconsistent accounting rules make it difficult to track corporate progress toward climate goals and to assess investment risks tied to emissions. A unified standard could improve market confidence and help firms better demonstrate their environmental performance.
What’s the background?
Current carbon-accounting systems, such as the Greenhouse Gas Protocol, often lead to double-counting of emissions because multiple companies report the same greenhouse gases across their supply chains and investments. The coalition seeks to address these gaps and align its framework with the International Sustainability Standards Board (ISSB) disclosure framework.
In the spotlight
Shareholders urge companies to cut ties with civil rights organization
What’s the story?
Shareholders at the Heritage Foundation filed resolutions at multiple U.S. corporations urging them to end partnerships with the Southern Poverty Law Center (SPLC). The filers said that continued association with the SPLC, a civil rights advocacy organization, poses ESG risks. They said that SPLC's Hate Map, which labels organizations it considers extremist and informs some companies' charitable giving programs, targets mainstream conservative organizations and creates legal and fiduciary challenges for firms that use SPLC's data.
Why does it matter?
The dispute underscores how ESG frameworks have become a flashpoint in broader political and cultural conflicts. Companies now face competing shareholder demands—some pushing for stronger social commitments, others warning against perceived political bias. This tension reflects the deepening ideological divide shaping ESG investing, where shareholder activism increasingly mirrors the nation’s wider debates over values, governance, and corporate responsibility.
What’s the background?
The SPLC, founded in 1971, is known for tracking extremist and hate groups and for its collaboration with federal agencies, including the FBI, through its hate-group data. On Oct. 3, 2025, the FBI announced it was ending its partnership with the SPLC, with Director Kash Patel calling the organization a “partisan smear machine” whose map “has been used to defame mainstream Americans.”
