In the latest in a series of efforts by Republicans to stop what they call “woke” investment decisions, the House voted to block a Biden administration rule that allows retirement plans to consider environmental, social, and corporate governance (ESG) principles.
The Republican-controlled House voted to adopt a joint resolution that would prevent the Labor Department from enforcing a rule that makes it easier for plan managers to consider ESG factors when they make investments and exercise shareholder rights, such as through proxy voting.
ESG stands for environmental, social, and corporate governance, and is a framework designed to be embedded into an organization’s strategy that considers the needs and ways in which to generate value for all organizational stakeholders.
This latest front in the culture wars is intensifying in part because ESG is seen as a threat to the oil, gas, and coal industries.
The Labor Department rule enacted late last year makes it easier for retirement plans to take into account climate change and other ESG factors when they choose investments.
The action marks the latest salvo in a Republican culture war against “woke” business practices.
It sends the measure to the Senate, where Republicans hope to muster enough support to pass it as early as Wednesday.
If it reached the White House, Biden is expected to veto it.
Republicans claim the Labor rule represents a Biden administration ploy to politicize investing by allowing plan managers to pursue liberal causes with the retirement savings of unwitting investors.
The regulation, which took effect in January, covers plans that collectively invest $12 trillion on behalf of more than 150 million people.
Experts said the Biden administration has made only cosmetic changes to an earlier regulation adopted under former President Donald Trump.
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