- Republican lawmakers introduced legislation Thursday to combat a recent ruling which allows plan fiduciaries to consider climate change and other environmental, social and governance (ESG) factors for investments.
- The joint resolution follows the DOL’s decision to allow ESG factors as an investment consideration and, if passed, will nullify the rule and prevent similar rules from taking effect in the future.
- The new rule works against the interest of investors, while also placing pressure on fiduciaries to focus on ESG factors over more significant financial factors, according to expert opinions.
Republican Indiana Sen. Mike Braun and Republican Kentucky Rep. Andy Barr introduced legislation Thursday to combat a recent ruling by the Biden administration’s Department of Labor (DOL), which allowed plan fiduciaries to consider climate change and other ESG factors for investments.
The joint resolution follows the DOL’s decision to allow ESG factors as an investment consideration and, if passed, will nullify the rule and prevent similar rules from taking effect in the future, according to Axios. By allowing ESG factors in investments, the DOL discriminates against the American energy sector, specifically oil and gas producers, Barr told Axios.
“We’re going to have a very fulsome agenda combating ESG, highlighting ESG for the fraud that it is,” Barr told Axios, referring to ESG as “a cancer within our capital markets.”
Alongside discrimination against oil and gas producers, experts previously told the Daily Caller News Foundation that the new rule will work against the interest of those who have funded the accounts, while also placing pressure on fiduciaries to focus on ESG factors over more significant financial factors.
“The problem with the DOL rule is not that it permits fiduciaries to consider ESG factors,” Amberwave Partners co-founder and portfolio manager Dan Katz previously told the DCNF. “The problem with the rule is that it adds to the enormous pressure on fiduciaries to overemphasize ESG factors over other, typically more significant, factors that ESG ignores.”
Barr believes the DOL rule will hurt Americans by “driving up prices at the pump, and preventing investors from reaping returns from high-performing energy stocks,” according to Axios.
“This is a mistake and betrays the interests of the people who the US Department of Labor is supposed to serve: American workers and retirees,” Strive Asset Management Executive Chairman Vivek Ramaswamy previously told the DCNF.
The legislation will provide two phases of oversight, Barr told Axios. The first will focus on regulators, to include bank regulators, the Federal Reserve and the Securities and Exchange Commission, while the second will target the private banks and asset managers.
The legislation will face an uphill climb in a divided Congress, but will raise the issues’s profile while also showing where lawmakers stand on the issue, according to Axios.
“Taking on Biden for attempting to make it easier for companies like BlackRock to put politics ahead of profits is only the beginning of what will be an ongoing effort to bring to light and take action against ESG, the biggest racket happening in America today,” Will Hild, executive director of the Consumers’ Research Group, told Axios.
BlackRock, an asset management firm, has recently pushed for ESG factors while working toward “net-zero emissions” by 2050. Many states have pulled funds from BlackRock in response to this goal, with Florida pulling $2 billion, Louisiana pulling $560 million, Texas banning the firm and Republican treasuries pulling $1 billion.
Despite BlackRock’s goal of reaching “net-zero emissions,” activist investor Bluebell Capital recently called for BlackRock CEO Larry Fink to step down, saying the company is not truly committed to ESG investments. Bluebell Capital accused Fink of “greenwashing” after he failed to fulfill a promise to exit thermal coal investments.
GOP committees are planning to bring in the CEOs of investment firms to testify before Congress, according to Axios.
Barr and Braun did not immediately respond to the DCNF’s request for comment.
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All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.
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