Sen. Sherry Moore Capito (R-WV) speaks to reporters during a press conference following the weekly Senate Republican Policy Luncheon at the US Capitol on February 28, 2023 in Washington, DC. talk to
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WASHINGTON — The Senate on Wednesday passed a Labor Department rule that would allow administrators of trust retirement funds to consider climate change, good corporate governance, and other factors when making investments on behalf of pension plan participants. decided to overturn.
The final vote in the Senate was 50-46, with two Democratic senators crossing party lines in favor of the repeal bill. Senator Joe Manchin of West Virginia and Senator John Testor of Montana. Both will be re-elected next year in more conservative states.
President Joe Biden he said on monday he would refuse If the Senate bill is on his desk, it’s the first veto of his presidency.
The House version of the bill passed with the support of every Republican and one Democrat on Tuesday before making its way to the Senate surprisingly quickly.
Bolstered by victory in November’s midterm elections, Republicans vowed to use their newfound influence in Washington to: Aiming for “awakened capitalism”— start with an all-out assault on environmental, social and corporate governance or ESG investment policies. ESG funds, for example, companies that do not contribute to climate change or practice good corporate governance.
Speaking on the Senate floor Wednesday, Majority Leader Chuck Schumer (DN.Y.) defended a Department of Labor rule that went into effect last November.
“This is not about ideological preferences, it is about investors looking at the biggest picture possible to minimize risk and maximize returns,” said Schumer. “Why shouldn’t we look at the risks posed by increasingly volatile climate events?”
Democrats also noted that the Labor Department’s rules are voluntary and don’t require fund managers to actually do anything.
Instead, it freed them from previous rules enacted during the Trump administration. This required managers of federally administered pension funds to limit their investment decisions to those that produced the best returns, effectively prohibiting them from considering other factors.
Republican critics of Labor Department’s new rule say it undermines 401(k) retirement funds by allowing investment managers to prioritize ideological issues such as climate change over investment returns .
“The last thing we should do is encourage trustees to make decisions with lower rates of return for purely ideological reasons.
Republican House Committee chairs, presidential candidates, etc. Florida Governor Ron DeSantis Wall Street’s ESG investment policies are positioned near the top of the political hit list as part of an effort to capitalize on the populist economic sentiment championed by former President Donald Trump.
anti-ESG campaign Backed by a small army of conservative nonprofits Many advocacy groups are associated with wealthy Republican political donors and fossil fuel companies.
Organizations with names such as 1792 Exchange and Consumers’ Research run generously funded advertising campaigns, accusing top investment firms such as BlackRock, Vanguard and State Street of politically motivated investments.
