House Republican introduces bill opposing ESG in retirement funds (2023)
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Congressman Andy Barr (R, Ky.) introduced a bill on June 21 opposing the Biden Labor Department’s rule allowing the use of ESG in retirement plan investments. Both chambers recently passed a Congressional Review Act (CRA) resolution overturning the Labor Department rule, but President Joe Biden (D) vetoed that legislation. Congressman Barr introduced the new bill in response:
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House Republicans are continuing their attempt to pump the brakes on so-called “woke” investing with new legislation that could place limits on financial advisors and retirement funds. Rep. Andy Barr, R-Ky., will introduce a bill Wednesday that would target funds that consider environmental, social and governance issues, known as ESG. Barr’s measure would update the Employee Retirement Income Security Act to require retirement funds to focus only on maximizing profits, limiting the ability to invest in ESG options. Retail investors would also need to be notified if their financial advisors invested their funds in an ESG. In addition, advisors would need to disclose the difference in fees and performance between ESG funds and a similar index. Proponents say ESG investing is intended to promote the social good, although critics say it hurts investors. “Environmental, social and governance investing has become a cancer and a fraud within our capital markets, steering retail investors, sometimes unwittingly, into lower-performing, less diversified and higher-fee funds,” Barr told CNBC … Barr’s bill doesn’t specifically block funds from being invested in ESG options. Rather, his goal is to ensure investors’ returns are prioritized ahead of social and environmental goals. Those who want to invest in ESGs would be able to do so but they would need to provide consent in writing. … While Barr’s broader ESG bill is unlikely to make it to Biden’s desk or even to the Senate, it could be a part of a larger effort Republicans on the House Financial Services Committee will make to highlight concerns around ESG investing in July. Barr, who’s a senior member of the committee, said several hearings are planned on the topic, as well as a package of bills.[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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