https://nypost.com/2023/02/07/gop-manchin-aim-to-block-biden-backed-esg-investing-rule/
A Republican-led group of 50 US senators is aiming to reverse a Biden administration-backed rule that they claim is effectively “politicizing Americans’ 401(k)s” by allowing retirement managers to consider environmental, social and governance standards — known as “ESG.”
The group, which includes all 49 Republican senators as well as moderate Democratic Sen. Joe Manchin of West Virginia, is targeting a Labor Department rule change that took effect on Jan. 30.
Sen. Mike Braun (R-Ind.), who introduced the resolution alongside Rep. Andy Barr (R-Ky.), said the Biden-backed ESG investment rule change was effectively “jeopardizing retirement savings for millions of Americans for a political agenda.”
“In a time when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons,” Braun said in a statement.
Republican lawmakers have been increasingly wary of ESG-based investments in recent years — with critics arguing that the push to consider climate change and other factors while doing business is driven by left-leaning ideology rather than fundamentals.
The lawmakers said the ESG rule impacts the retirement savings of 152 million American workers whose accounts are governed by the Employee Retirement Income Security Act, or ERISA. The change impacted existing ERISA standards.
Manchin said it was “irresponsible of the Biden Administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes.”
“I encourage my colleagues on both sides of the aisle to support this important resolution to ensure Congress is promoting economic security for West Virginians and Americans, not further exacerbating the serious economic challenges they are already facing,” he added.
More than 100 groups and entities have endorsed the GOP-backed resolution, including the state treasurers of seven states and Advancing American Freedom, former Vice President Mike Pence’s policy group.
“Most Americans think it’s a bad idea for companies to use their financial influence to advance a political or social agenda, as is the case in ESG investing,” Advancing American Freedom executive director Paul Teller said in a letter on behalf of the organizations backing the resolution.
“Forcing Americans into ESG investment is not only politically inappropriate, it is also financially irresponsible,” the letter added.
Even with Manchin’s support, the GOP-backed resolution could face an uphill battle for passage in the Senate, where the Democrats hold a 51-49 majority. At least one other Democrat would have to back the legislation.
Last week, a group of 25 Republican state attorneys general filed a lawsuit against the Labor Department in a bid to block the ESG rule, Roll Call reported. The change will remain in place while the legal case proceeds.
The lawsuit alleged that the Labor Department’s alteration “contravenes ERISA’s clear command that fiduciaries act with the sole motive of promoting the financial interests of plan participants and their beneficiaries.”
Florida Gov. Ron DeSantis, a likely candidate for the Republican presidential nomination in 2024, is among the most outspoken critics of ESG-based investment of taxpayer funds.
In August, DeSantis backed a resolution banning Florida state pension funds from considering ESG standards.
