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What They’re Saying: Biden’s ESG Rule Hurts America’s Workers, Retirees

The Biden administration is putting the retirement security of millions of Americans at risk. The Biden administration’s new rule—which enables and encourages retirement fiduciaries to consider environmental, social, and governance (ESG) factors—will allow activist investors to funnel retirees’ savings into progressive, left-wing causes. Moreover, ESG funds are notorious underperformers and relatively high-risk, leaving the futures of retirees less secure.
Republicans have a solution—H.J. Res. 30 will nullify Biden’s rule restoring the 2020 Trump DOL protections, which made clear that retirement plan fiduciaries must make investment decisions and exercise shareholder rights based solely on whether they enhance retirement savings.
Here’s what they’re saying about Biden’s radical ESG rule and Republican efforts to protect America’s workers and retirees:
“Forcing Americans into ESG investment is not only politically inappropriate, it is also financially irresponsible. According to research from the University of Chicago, mutual funds scoring highly on ESG factors are constantly outperformed by funds rated lowest for ESG. …Under the Trump-Pence administration, the U.S. government protected retirees from this kind of abuse by issuing a rule clarifying that, under ERISA, the managers of retirement funds could not engage in ESG investment if it would have a negative impact on retiree’s savings or expose them to additional risks (‘Financial Factors in Selecting Plan Investments’). Tragically, on November 22, 2022, the Biden administration chose to undermine the Trump-Pence safeguards by issuing their own ERISA rule that would make it easier for retirement fund managers to imperil retirees’ savings. …Fortunately, Congress can overturn the Biden administration’s dangerous ESG rule through the Congressional Review Act (CRA).” – More than 60 Organizations led by Advancing American Freedom
“There is no room for ESG when considering how to invest retirees’ lifesavings. Retirement plan managers should only consider pecuniary factors when making investment decisions.” – Grover Norquist, President of Americans for Tax Reform
“Rep. Barr’s legislation protects American retirement accounts from the Biden administration’s proposed woke regulations that would encourage employers to use ESG benchmarks in their investment decisions for employee 401(k) retirement accounts. It would ensure employers and investors fulfill their fiduciary duty to focus only on shareholder returns rather than the activist agenda that threatens savings. Rep. Barr’s legislation would block Biden’s attempt to put social engineering ahead of shareholders and savings accounts.” – Alfredo Ortiz, President and Chief Executive Officer of the Job Creators Network
“[T]he 2022 Rule threatens the financial stability of millions of Americans and blatantly violates federal law… Given the detrimental effects this brazen violation of federal law will have on millions of Americans, we urge Congress to disapprove the 2022 Rule. Under the CRA, Congress has the power to erase this federal rule by issuing a joint resolution of disapproval.” – Attorneys General from 27 states
“What is insidious about the new Biden administration ESG rules is that they permit and even tacitly encourage portfolio managers at firms such as BlackRock to violate their fiduciary duty to their clients by allowing ESG factors to trump sound investment decisions. Federal regulators are supposed to be ensuring the soundness of retirement funds, not shrinking them.” – Stephen Moore, Distinguished Fellow in Economics at the Heritage Foundation
“President Biden is trying to use Americans’ retirement savings to bankroll his extreme agenda. Many Americans have already delayed retirement because their 401ks have taken a hit under President Biden — the last thing they need is a government bureaucrat risking the rest of it on this Administration’s failed policies. Americans should tell Congress and President Biden to keep politics out of their retirement savings and protect their abilities to make the best investment decisions for their retirements.” – Brent Gardner, Americans for Prosperity
“ESG is a pernicious strategy, because it allows the left to accomplish what it could never hope to achieve at the ballot box or through competition in the free market. ESG empowers an unelected cabal of bureaucrats, regulators and activist investors to rate companies based on their adherence to left-wing values.” – Mike Pence, former Vice President of the United States
“ESG is the devil” – Elon Musk via Twitter
“Pushing preferred political outcomes over the long term financial security of hardworking Americans is a bad idea that runs counter to the law. I'm glad Republican leaders are standing up and pushing back against Biden's harmful ESG agenda. Retiree savings should not be subject to radical, financially draining ideas from the woke Left.” – Mandy Gunasekara, Director of Center for Energy and Conservation, Independent Women’s Forum

“I doubt most people buying [ESG] funds following this approach realize how much they are paying and how little they are getting. At the average ESG fund, the effective fees can be three times what’s reported, according to a new study. That’s because these funds—also often called green, sustainable or responsible—are nowhere near as pure as they purport to be.” – Jason Zweig via The Wall Street Journal
 "ESG is an approach to investing that brings politics—particularly left politics—and inserts it into the financial process. The problem is that we ought to make investment decisions based on financial criteria, not politics." – Concerned Women for America 

“Tragically, on November 22, 2022, the Biden administration chose to undermine the Trump-Pence safeguards by issuing their own ERISA rule that would make it easier for retirement fund managers to imperil retirees’ savings. With 22 percent of Americans expected to rely upon their retirement savings and benefits in 2050, this policy of misappropriation cannot be allowed to stand.” – Institute for the American Worker
“This week, Congress will have an opportunity to stand up and defeat a Biden administration rule that would jeopardize the retirement accounts and 401(k)s of more than 150 million American workers. …The Department of Labor’s new rule would allow woke asset managers to use the nearly $11.7 trillion in assets from the retirement accounts of over 150 million Americans to fund the Left’s political agenda. In practice, this means that asset managers are allowed to weaponize American workers’ retirement savings to work against both their financial interests and their values. Biden’s rule is an insult to hardworking American taxpayers and an attempt to violate the important fiduciary requirement of Congress’s Employee Retirement Income Security Act of 1974.” – Jessica Anderson, Heritage Action Executive Director
“By injecting highly partisan issues—like climate change and racial justice—into investment strategy, the Biden Administration is jeopardizing the retirement income of over 140 million Americans. Their new rule far exceeds the law and their constitutional authority.” – Kate Spitz, Associate Counsel at the Wisconsin Institute for Law & Liberty

"Americans are already feeling the strain of inflation that are negatively impacting retirement plans. Investing employees hard-earned money into potentially underperforming ESG stocks will continue to hurt our nation’s families and economy." – Kris Ullman, President of the Eagle Forum 

"The Congressional Review Act is in place for exactly this reason. The Department of Labor’s final rule is a clear cut example of government overreach and Congress should act swiftly to protect taxpayers’ retirement accounts. The primary responsibility of any fiduciary should be to evaluate investments based on the financial benefits to the plan participants. NTU is a proud supporter of H.J. Res. 30 and thanks Rep. Andy Barr (R-KY) for standing up for taxpayers everywhere." – Alex Milliken, Policy and Government Affairs Manager at National Taxpayers Union

"The effect of these policies is to shift priorities for investment advisors away from what is in the interest of investors. ESG policies also allow government and large investment firms to pick winners and losers of capital and investments, which can reduce the supplies of certain goods available in an economy and increase prices. These price increases occur at a time when small businesses are still recovering from high inflation, supply chain disruptions, and pervasive workforce shortages." – Kevin Kuhlman, Vice President of Federal Government Relations at the National Federation of Independent Business

"[C]orporations are seizing the opportunity to use environmental, social, and governance (ESG) standards to further the encroachment of critical race theory, queer theory, and climate activism into school systems. As companies adopt ESG standards, the discussion about how to integrate education into an organization’s ESG focus has become increasingly robust. Businesses are seeking ways to boost their own ESG corporate rating, which benefits from investment in K-12 education." – Parents Defending Education

"In a world of political wimps, Senator Braun and Representative Barr are gathering the political will around them to fight one of the chief threats not only to America’s economy and foreign relations, but her very sovereignty as a nation-state. Good for them, and may they have hundreds more groups and coalitions gather around their fight against ESG insanity." – Ed Martin, President of Phyllis Schlafly Eagles

"FreedomWorks supports this bill and believes that these ESG standards place this left-wing social justice agenda ahead of companies’ and investment firms’ fiduciary responsibility to their shareholders and clients." – FreedomWorks

"The financial institutions that manage 401k and other retirement plans are fundamentally stewards of other people's money. They cannot and should not be using other people's retirement funds to push their own political agendas. The Department of Labor's rule opens the door to this sort of outrage, allowing plan fiduciaries to inject political beliefs into the investment decision process." – Thomas Pyle, President of American Energy Alliance
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