On Wednesday’s broadcast of CNBC’s “Squawk Box,” White House National Economic Council Director Brian Deese weighed in on ESG investment by stating that companies “should” make “business decisions based on what’s in the fiduciary interests of their stakeholders.” And the Biden administration, through the “energy provisions of the Inflation Reduction Act,” has put in place a policy framework “to encourage the production of lower-carbon energy going forward.”
Co-host Andrew Ross Sorkin asked, “Hey Brian, weigh in on this issue around ESG, you worked at BlackRock before you came into the White House. You probably saw the news this morning, there’s a firm out of the U.K. that effectively is asking your former boss, Larry Fink, to step down, arguing that he’s not doing enough when it comes to ESG. Of course, Blackrock’s gotten it on the other side for the last six months to a year from a number of red states that have been pulling their money out of the firm, arguing that they’re doing too much. Where do you land?”
Deese responded, “Well, look, companies will make their own individual business decisions based on what’s in the fiduciary interests of their stakeholders. That’s what they should do. That’s what we expect them to do. As we think about this, we think about it from a policy perspective, and the United States has not had, for years, clear, effective policy when it comes to, for example, decarbonization. And now, we have in place — this is a big part of why we worked on passing the energy provisions of the Inflation Reduction Act, is you now have a policy framework of long-term incentives from the government to try to produce more energy domestically, but to encourage the production of lower-carbon energy going forward. That’s the kind of work we need to do on the policy side and then companies need to make their own individual decisions based on the interests of their fiduciary –.”
Sorkin then asked, “But, to that point, those policies, ostensibly, should make it more attractive, and should make there to be the opportunity for greater returns in these spaces. And so, when people look at the investments that a company like BlackRock is making or not around climate, do you think those are economically-driven decisions or do you look at them and say that these are decisions made for other reasons?”
Deese answered, “Well, as I said, any individual company decision, I’m going to leave to the companies. And I assume they’re going to be made in the fiduciary interests of that company. What I will say is that the policy environment in the United States is encouraging investment in the United States, in clean energy capabilities and clean energy technologies at a rate that we have not seen in recent history. I talk to CEOs of operating companies across the board who say, now that we have certainty over the long term of what the tax regime is going to be in the United States, the kinds of incentives you get for investing here in the United States, I find this an attractive place to build out battery capability, to build out hydrogen and carbon capture and sequestration, we’re going to have the largest carbon capture project down…in the world here in the United States. All of those things are companies’ decisions based on their economic interests, but into a policy environment that is trying to encourage that type of investment, that kind of economic opportunity here in the United States.”
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