House GOP passes four more bills opposing ESG out of committee (2023)
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House Republicans on September 14 passed four new ESG bills out of the Education and Workforce Committee, bringing the total number of ESG bills passed out of committee this year to seven. The move followed the lead of the House Financial Services Committee, which advanced its own slate of bills opposing ESG in August:
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Republicans signaled that removing environmental, social and governance considerations from financial decision-making will remain a hot-button issue for them in 2024 political campaigns by advancing another package of bills that observers say is more about messaging than substance. The Education and Workforce Committee passed four measures Thursday along party lines that together would generally attempt to restrict—but not prohibit—investment advisers and financial institutions from considering ESG factors in retirement-investment advice. … Authors of the latest measures say they’re trying to rein in ESG policies that are overly burdensome for businesses. Three of the four measures would tweak the Employee Retirement Income Security Act of 1974 (Pub. L. No. 93-406) to return to Trump-era policies at the Department of Labor. “Advancing a radical political agenda at the expense of retirement savers is wrong,” said committee chair Rep. Virginia Foxx (R-N.C.), in a statement to Bloomberg Law. “These bills seek to ensure financial institutions are focused on maximizing returns in retirement plans rather than on woke ESG factors.” … The anti-ESG bills approved by the Education and Workforce Committee don’t outright ban retirement-wealth advisers from recommending ESG-labeled investments. The first bill—the “Roll back ESG To Increase Retirement Earnings Act"—sponsored by Rep. Rick Allen (R-Ga.), prevents advisers from considering “non-pecuniary” factors, or factors not related to money, when giving advice. Allen said in an interview that Biden’s rules, which replaced Trump’s, impose a political ideology on retirement plans. “The White House does not need to determine how you invest your money,” Allen said. “This administration is forcing all of this on our economy and the American people—and the American people don’t like it. The American people want choice.” But the bill doesn’t lay out what qualifies as pecuniary, thus introducing confusion into investment decisions and creating more work for advisers to affirm their guidance is prudent, said Natalia Renta, senior policy counsel for corporate governance and power at the left-leaning organization Americans for Financial Reform. Fiduciaries need to weigh every risk and opportunity to provide the best advice for their clients, Renta said. “If you try to create these categories of things that you shouldn’t take into account, then that just creates confusion and [puts] retirement security at risk if fiduciaries feel unsure of what they’re allowed or not allowed to consider,” she said. Another bill in the package—the “Retirement Proxy Protection Act,” introduced by Rep. Erin Houchin (R-Ind.)—would block advisers from promoting “non-pecuniary benefits or goals unrelated to those financial interests of the plan’s participants and beneficiaries.”[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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