Republican lawmakers overrule new Labor Department rule allowing retirement plan trustees to consider climate change and other environmental, social and governance factors when choosing investments and exercising shareholder rights filed another joint resolution to
A joint resolution introduced on Thursday by Senator Mike Brown (R, Indiana) and Rep. Andy Burr (R, Kentucky) said Congress “does not approve” the Labor Department’s rule, and that “such rule has no force or effect,” he said.
The resolution, which will not be enacted with Democrats controlling Congress and the White House, further demonstrates Republican hostility to the Labor Department’s latest rulemaking.
Ark Senator Tom Cotton introduced the same resolution earlier this month.
Republicans will take control of the House next year, and will likely increase scrutiny of the department, especially when it comes to ESG issues.
On November 22, the Department of Labor finalized prudence and loyalty in choosing planned investments and exercising shareholder rights. The rule, which goes into effect Jan. 30, overturns two rules promulgated later in the Trump administration that require retirement plan fiduciaries to sacrifice investment returns or take additional risks. He outlined that he could not invest in a “non-monetary” vehicle. The process that a trustee must follow when making proxy voting decisions.
The new rules will allow ERISA fiduciaries to consider ESG factors, but will not allow fiduciaries to sacrifice investment returns or take on greater investment risk as a means of furthering attendant social policy goals. ERISA’s position that it should not be maintained.
Stakeholders said the rule is more neutral than the Trump-era rule, which was viewed as anti-ESG, and the proposal on which it was based, which was viewed as pro-ESG.
But Barr said in a news release that the resolution is necessary to protect investors. “By finalizing rules that allow plan fiduciaries to consider ESG factors, Biden’s Labor Department is not only keeping capital out of the U.S. energy sector and driving up prices, but also unwitting federal employees. are threatening the interests and financial security of their severance payouts, which are likely to be invested in high-fee, low-diversification and underperforming ESG-related products in the name of awakened politics. ‘ said.
A Labor Department spokesman did not immediately respond to a request for comment.
In the Senate, the resolution’s cosponsor is Bill Haggerty (Tennessee Republican). James Lankford, R-Okla.; Richard Burr, RC; and John Kennedy, R-La. In the House, Rick W. Allen, Galia Republican, Bill Huizenga, Michigan, Gregory F. Murphy, RC, Brian Steil, R-Wisconsin, French Hill, R-Ark., and Brad Finstad, R. -Minn.
