© Reuters. FILE PHOTO: US Senator Mike Braun (R-IN) speaks to reporters in the Senate subway on Capitol Hill in Washington, U.S., July 19, 2022. REUTERS/Elizabeth Frantz
By David Morgan
WASHINGTON (Reuters) – The Republican-controlled U.S. House of Representatives votes on Tuesday on a bill to block President Joe Biden’s administration from allowing retirement plans to consider environmental, social and corporate governance issues ( ESG) in their investment decisions.
Republicans hope to adopt the measure in a House vote by late afternoon, and could have enough support in the Senate to send it to Biden, a Democrat the White House has said would veto the bill that would prevent his own Department of Labor to enforce a law. new ESG rule.
Senate Republican Leader Mitch McConnell said the bill would ensure plan managers consider only financial returns when making investments, and not “extraneous factors” such as environmental pollution and employment policies.
“I will be proud to support this common sense move later this week,” McConnell said in a speech on the floor.
It is the latest salvo in the Republican culture war against the use of themes that promote environmental interests, social equality and corporate responsibility in business and investment decisions.
The battle is likely to intensify as the 2024 presidential campaign begins. Florida Gov. Ron DeSantis, widely seen as a top contender for the White House, has already made his own fight against “woke up” companies. “a hallmark of his image.
The Department of Labor rule, which covers plans that collectively invest $12 trillion on behalf of more than 150 million people, makes it easier for plan administrators to consider climate change and other environmental, social, and governance factors when making investments for the retirement and exercise the rights of shareholders. Like proxy voting.
It also requires plans to follow traditional financial considerations.
The Republican joint resolution stipulates that the rule “shall have no force or effect.”
“Retirement plans should focus solely on providing maximum returns, not furthering a political agenda,” said Republican Rep. Andy Barr, who introduced the House resolution.
The measure is widely expected to pass the House, where Republicans hold a slim 222-212-seat majority.
A vote could follow as early as Wednesday in the Senate, where Democrats hold a 51-49 majority. The Republicans have the support of their 49 members and Democratic Senator Joe Manchin. But they might need an additional Democrat or one of the three independents who normally vote with Democrats to pass the measure by a simple majority.
“There’s going to be two or three votes, I think, that won’t be revealed until it hits the floor,” said Republican Sen. Mike Braun, who introduced the Senate measure.
Braun introduces the resolution under the Congressional Review Act, which bypasses the Senate’s “fidelity” rule that requires the support of 60 senators to pass most bills.
The White House said Monday that Biden will veto the bill if it reaches his desk.
“The rule reflects what successful market investors already know: there is ample evidence that environmental, social and governance factors can have material impacts on certain markets, industries and companies,” it said in a statement.
Last week, 25 Republican-led states asked a federal judge in Texas to block the same rule, warning that the regulation could lead to millions of Americans losing their retirement investments and hurting state finances. The plaintiffs in the case include an oil drilling company and an oil and gas trade group.
