Republicans are attempting to dismantle a recent Department of Labor rule that allows retirement plan fiduciaries to consider environmental, social, and governance (ESG) factors in their investment decisions, Axios reports.
The rule, issued in November 2021, was a response to an executive order signed by President Biden in May 2021 directing federal agencies to consider ESG policies.
Senators Mike Braun (R-Ind.) and Rep. Andy Barr (R-Ky.) are introducing a joint Congressional Review Act measure that would nullify the DOL rule and prevent similar rules from being implemented in the future.
Rep. Barr claims that the DOL rule discriminates against the American energy sector, particularly oil and gas producers, and will hurt Americans by “driving up prices at the pump, and preventing investors from reaping returns from high-performing energy stocks.”
While the measure is unlikely to pass in a divided Congress or with President Biden in office, it is meant to raise the profile of the issue and force lawmakers to publicly declare their positions.
The move has gained support from conservative groups that oppose ESG policies.
Rep. Barr, who will be a senior member of the House Financial Services Committee in the new GOP majority, has stated that his party will have a “fulsome agenda” targeting ESG policies, including both regulatory and legislative efforts.
The GOP is also planning to summon CEOs of investment firms, including BlackRock’s Larry Fink, to testify before Congress.
Conservative groups are already showing enthusiasm for the move, eager to participate in the ESG battle. Will Hild, executive director of the conservative Consumers’ Research Group, told 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.”
The attorneys general of 19 states are already investigating companies over their ESG ties, and the Texas state senate recently summoned executives from BlackRock and State Street Corp to testify before a committee on their ESG agendas.
The legislation will face challenges in a divided Congress, but is designed to raise the issue’s profile and force lawmakers to declare their positions.