(Radio Iowa) – Iowa Congressman Zach Nunn is sponsoring a bill that would require new public disclosures from two companies that have an outsized role in the investing world. Nunn’s legislation targets two firms that control shareholder votes and guide public firms’ investments that promote environmental, social and governmental or E-S-G priorities. “Under current law, investment managers may actually decide to invest based on a company’s policies or even their political views rather than focus on maximizing return for investors,” Nunn says.

Some states have passed laws that forbid state contracts with companies that follow what’s called E-S-G investing. Iowa legislators considered a ban on companies, including banks, that do not invest in the gun industry, agriculture or the petroleum industry. Nunn, a Republican from Bondurant, says his bill does not call for that, but would require disclosure when those kind of policies are pursued for investments.

“If you were a family who had a very strong moral or even a political belief, you may not know that you’re actually funding something on the complete on the other side of the aisle,” Nunn says. “Whether you’re a Democrat or a Republican, we’ve got to have some transparency in here and, most importantly, I don’t want two companies making these decisions and then everybody else basically carbon copying their recommendations because they’re not doing the due diligence to really realize where those portfolios are going.”

Nunn is a member of the House Financial Services Committee. Firms that handled shareholders’ proxy voting were initially seen as a way for investment advisors to avoid conflicts of interest. The two firms involved have argued new regulations, in general, add an unnecessary speed bump to the process of shareholder votes.