State legislatures in New York and New Jersey are following California in requiring corporations to disclose their carbon emissions and climate risks, possibly creating a de facto national standard.
The US Senate appears likely to restore New Markets Tax Credits and make them permanent in the massive tax and budget bill under consideration. That would reverse the move by the House of Representatives to eliminate the credits, which have catalyzed billions of dollars in private investment in quality jobs and access to healthcare, education and healthy food in distressed communities.
And in dozens of states, including Oklahoma and West Virginia, bills that would have prohibited the consideration of environment, social and governance factors in investment decision-making have been reversed, reformed, or defeated or stalled, in some cases with the support of right-of-center taxpayer advocates.
“Each one of these defensive pieces is a win. We are slowing them down,” says Andrew Collier, who heads the Freedom to Invest campaign for Ceres, the nonprofit sustainability advocacy organization. “As anti-ESG bills don’t get passed, we’re changing the narrative.”
Collier is joining tomorrow’s Agents of Impact Call, “Policy action for shared prosperity,” produced by ImpactAlpha in partnership with the US Alliance for Impact Investing (RSVP). Led by Fran Seegull, the Alliance is emphasizing the need for rapid response and a spirited defense against attacks on sustainable finance and impact investing, as well as opportunities for small wins in the current political environment.
Heather Slavkin Corzo, who spent three years as policy director for the Securities and Exchange Commission will trace prospects for longtime policy priorities such as human capital management and climate-risk reporting. As the director of capital markets policy for the AFL-CIO and a fellow at Americans for Financial Reform, Slavkin has been a longtime policy advocate on hot-button issues such as stock buybacks and the carried-interest tax deduction for private equity investors.
Opportunity Zones 2.0
Opportunity Zones, which leverage capital-gains tax breaks for real-estate and small business investments in low-income neighborhoods, appear poised to get some needed reforms and permanent status as part of the omnibus tax and budget bill now before Congress. Critics have questioned whether the tax breaks merely supercharge projects that would have attracted financing anyway.
On the Call, Catherine Lyons of Economic Innovation Group, the bipartisan research outfit that helped develop the original idea, will point to new research that Opportunity Zones have roughly doubled the number of new housing units in designated zones between 2019 and 2024, and at a low cost per unit to taxpayers.
“And we hear a lot of the critiques of this policy saying, ‘Well, it’s just incentivizing things that would have already happened anyway or in places that would have already received this investment.’ This essentially puts that argument to bed,” Lyons said recently. “At least in the use case of housing, OZs are actually causing a great deal of new housing happening in these places that would not have happened otherwise.”
Bipartisan support was critical as well in rallying behind community development financial institutions, or CDFIs, which are often the only lenders remaining in many communities, including in “red” states and congressional districts. That support helped beat back a March executive order to dismantle the Treasury Department’s CDFI Fund.
The fund, budgeted at $324 million last year, catalyzes eight times that amount in private sector investments, according to advocates, who now are fighting to maintain or increase the fund’s budget authorization, and to make sure that existing funding is actually deployed.
The Senate’s 28-member CDFI caucus is chaired by Democratic Sen. Mark Warner and Republican Sen. Mike Crapo, “all in a group saying, ‘We think it’s really important to invest in our communities through these institutions,’” said Dafina Williams of Opportunity Finance Network, a network of leading CDFIs.
“This industry has been very deliberate to build bipartisan support, and we’ve been able to leverage that in these more challenging moments.” On the Call, Williams can also update the latest state of play on incentives such as the New Markets Tax Credit and the Low-Income Housing Tax Credit.
Threat to CDFI Fund gives community lenders a chance to flex bipartisan support
State level
While Congress debates, many of the opportunities for progress, as well as for playing defense against legislative overreach, are occurring in state capitals.
In Oregon, the legislature codified a net-zero plan for the state’s $101 billion public pension funds that would end investments in new private equity funds primarily backing fossil-fuel investments and triple, to $6 billion, “climate positive” investments in private equity and real assets.
Ceres has worked with state banking alliances, as well as taxpayer organizations such as Taxpayer Protection Alliance and National Taxpayers Union to push back on legislation that stands to raise costs for municipal bonds and other state financing mechanisms. A study last year found that such legislation in Texas cost taxpayers more than $700 million.
In Georgia, lawmakers introduced a bill to prohibit financial services companies from “discriminating” over ESG factors. The bill failed on the Senate floor.
“The most common argument is the economic impact of these bills and what it means for everyday taxpayers,” Collier said “It’s been proven that these bills will raise municipal bond rates and cause taxpayers to shovel out more from everything from putting in a traffic light to rebuilding a firehouse.”
Collier said more than 100 anti-ESG bills have been introduced in 2025 alone, with only five or six signed into law.
“So the big success has been the pushback on this,” he said. “But the attack hasn’t slowed down at all.”
