Republicans and a handful of Democrats in the House and Senate rebuked the White House over a rule that would allow retirement fiduciaries to invest in accordance with the environmental, social, and corporate governance movement, also known as ESG.
The Labor Department published a final rule last year that reflected the Biden administration’s directive to safeguard the economy from “climate-related financial risk that may threaten the life savings and pensions of America’s workers and families.” Under the new rule, which reverses a prohibition formerly created under the Trump administration, fiduciaries are allowed to weigh “the economic effects of climate change and other ESG considerations” as long as such concerns are relevant to a risk-and-return analysis.
Members of the House voted 216-204 in favor of a resolution to scrap the rule, while members of the Senate approved the resolution 50-46. Sen. Jon Tester (D-MT), Sen. Joe Manchin (D-WV), and Rep. Jared Golden (D-ME) voted alongside Republicans to advance the measure, which was introduced by Sen. Mike Brain (R-IN) and Rep. Andy Biggs (R-AZ).
“President Biden is putting Hoosiers’ retirement savings at risk by changing the rules to allow money managers to invest based on progressive political goals rather than on the best rate of return,” Braun said in a statement. “President Biden will now receive a searing, bipartisan rebuke of his policy that’s going to hurt Americans’ retirement savings.”
Republicans celebrated the resolution’s passage as an admonishment of the Biden administration’s support of the ESG movement. Beyond the multiple Republican state attorneys general who filed suit against the rule, Republican state treasurers likewise divested some $12 billion from asset management company BlackRock last year over the firm’s embrace of ESG.
“Today’s bipartisan vote makes clear what we have long said: ESG is an attempt to circumvent the democratic process to advance an inherently political agenda,” State Financial Officers Foundation CEO Derek Kreifels said in comments provided to The Daily Wire. “Any move to supplant or dilute the fiduciary duty would undercut the foundations of our economic freedom and harm the American worker.”
The previous rule established by the Trump administration prohibited retirement fund managers from “selecting investments based on non-pecuniary considerations.” It required them to “base investment decisions on financial factors” alone. Skeptics of the ESG movement assert that the investment philosophy mingles political and social causes, such as reducing carbon emissions and achieving racial diversity, in a manner that compromises or distracts from profitability.
Biden is expected to nix the resolution, which would mark the first veto of his administration.
CLICK HERE TO GET THE DAILY WIRE APP
“Republicans talk about their love of free markets, small government, and letting the private sector do its work. The Republican bill is opposite of that,” White House Press Secretary Karine Jean-Pierre said in a prepared statement delivered on Wednesday. “It forces MAGA Republicans’ ideology down the throats of private sector and handcuffs investors as well.”
ESG could emerge as a core issue in the Republican presidential primary. Former President Donald Trump and Florida Governor Ron DeSantis, who currently lead early polls as Republican voters’ preferred nominees, have each spoken against the totalizing investment philosophy, while former Strive Asset Management Executive Chairman Vivek Ramaswamy entered the contest and placed the issue at the center of his platform.