U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.), U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho), U.S. Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Richard Burr (R-N.C.), and U.S. Senate Aging Committee Ranking Member Tim Scott (R-S.C.) are urging the Department of Labor (DOL) to protect the retirement savings of millions of Americans by withdrawing a recent proposal that allows Wall Street asset managers to promote global warming and other environmental, social, and governance (ESG) objectives using the hard-earned funds of U.S. workers and retirees.
In a letter to Secretary Walsh, the Ranking Members wrote:
“[T]he proposal effectively mandates consideration of climate change and ESG factors in all investment and proxy voting decisions. In addition, the proposal vastly expands the circumstances in which retirement plan fiduciaries can pursue ‘woke’ ESG causes even when they provide no financial benefits to plan participants and beneficiaries. As a result, it will significantly harm Americans’ retirement savings by allowing plan fiduciaries to promote non-pecuniary policy objectives like lowering global carbon emissions and promoting ‘social justice’ rather than being solely focused on maximizing investment returns.”
On October 13, DOL released a proposed rule that purports to dismantle two actions taken in 2020 that amended the Investment Duties regulation under the Employee Retirement Income Security Act of 1974 (ERISA) and ensured fiduciaries put the financial interests of American workers and retirees above non-pecuniary interests, like global warming and social justice, when selecting investments and exercising shareholder rights.