In the GOP's latest salvo against environmental, social, and governance (ESG) investing, the Republican-majority House approved a resolution Tuesday that would repeal a Biden administration rule for retirement investments.
The Congressional Review Act (CRA) resolution was passed 216-204 in a largely party-line vote.
Rep. Jared Golden, D-Maine, was the only Democrat who voted with Republicans in favor of the measure, according to The Hill.
Though the measure likely won't pass in the Democrat-controlled Senate and White House, it is part of a wider Republican effort to push back against ESG investing.
In a floor speech Tuesday, Rep. Michael Burgess, R-Texas, called the regulation part of a "woke ESG agenda."
"Democrats and their radical environmental-NGO allies will continue to work in the shadows, strong-arming and intimidating corporations and investors alike, using any means necessary, to conscript the life savings of pensioners and retirees to implement a dangerous … investment strategy," said Burgess, according to The Hill.
Republicans are seeking to repeal the Biden rule that allows money managers to consider climate change and other ESG factors when making investment decisions.
According to Forbes, ESG investing "considers non-financial factors in their investment decisions, factoring in social accountability, which can ban investments in gun and fossil fuel companies."
Proponents of this type of investing argue that it allows people to leave the world a better place, while also bettering their own situations.
However, GOP leaders might counter by saying financial institutions should not use its power to invest in green political agendas, and that retirement plans should focus solely on maximizing returns instead of ESG factors.
During the Trump administration, the Labor Department passed rules discouraging ESG investing. However, last November, President Joe Biden relaxed the rules and made it easier for employers to consider ESG investments for their 401(k) plans.
Critics could point to Trump-era rules being too confusing. Plus, it discouraged money managers' consideration of ESG factors.
"The Trump rule, it's extremely convoluted and just confusing," Andrew Behar, CEO of As You Sow, told The Hill.
Behar's group seeks to use shareholder power to further action on climate and environmental issues.
House Democrats denounced the CRA resolution, saying that Republicans were attempting to obstruct the free market by blocking ESG investing.
"Retirement plan fiduciaries should be free to consider climate change and other ESG factors without regulatory barriers or the threat of litigation," Reps. Sean Casten, D-Ill., and Juan Vargas, D-Calif., co-chairs of the Congressional Sustainable Investment Caucus, said in a joint statement.
"This CRA resolution is the latest dangerous move in Republican's anti-worker and anti-free market agenda," added the Casten-Vargas statement.
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