The battle over environmental, social and governance (ESG) issues to determine pension investments continues unabated, with members of the House Ways and Means Committee digging deep in their hearing titled “Protecting Seniors and Savers from ESG Activities.” “
Among the witnesses at the four-hour hearing was Preston Rutledge, principal and founder of the Rutledge Policy Group. Jason Isaacs, Director of Life: Power; Marlo Oakes, Utah State Treasurer; Mason Bolay, Senior Vice President of First Bank & Trust Company; and Brandon Reese, deputy director of the AFL-CIO Office of Investments.
In a sense of the tenor of the hearing, many of the committee’s Democrats spent much of their time arguing against the main focus of the hearing, citing much larger issues, such as funding the federal government for the 2024 fiscal year. Or protecting Social Security, with committee Republicans arguing that, among other things, an “extreme ESG agenda” would threaten seniors’ retirement savings.
“Working families need that protection to prevent Wall Street money managers from prioritizing far-left policies over their retirement security. But in the past two years, we’ve seen the ESG agenda turn into a pressure campaign, in some cases forcing investment advisors to gamble with retirees’ nest eggs.” Rep. Jason Smith (R-MO), chairman of the House Ways and Means Committee, said in his opening remarks.
In contrast, Richard Neal (D-MA), a Democrat and former chairman of the committee, said pension policy has traditionally served as a bipartisan issue, but argued that the ESG issue is another “crisis designed to distract the base.” Lack of Legislation”
“The biggest threat to Americans’ retirement security is the calls for cuts to Social Security and the hysteria and borderline obsession from my colleagues on the other side of the aisle. Can you imagine after a lifetime of being told by House Republicans how you can and cannot invest your savings?” Rep. Neal added, “Politicizing retirement policy puts workers’ hard-earned savings at risk, which is the last thing the American people need.”
In his testimony, Rutledge, a frequent guest speaker before events sponsored by the American Association of Retired Persons, said ESG legislation focused on making history and stayed away from the politics surrounding ESG. Isaacs, Oaks and Bolay, on the other hand, used their testimony to use ESG factors, pointing out, among other things, that it is “armed” against important industries and encouraging lawmakers to focus on the free market instead. Principles.
Reese, meanwhile, appears to be the only witness to fully defend ESG factors by fiduciaries, arguing that Congress should not “play politics” with the nation’s pension fund. “We view the attacks on ESG investing as little more than partisan politics and the search for sound bites – rather than based on real facts. Furthermore, proposals to limit investors’ ability to consider ESG factors have more in common with a command economy than a free market system.”
To be clear, the Department of Labor in 2011 It issued a final rule in November 2022—saying that plan fiduciaries can (but don’t have to) consider ESG factors when they have “prudence and integrity in selecting plan investments.” Impact on investment results The regulation has been implemented since January 30, 2023.
Meanwhile, a group of 26 “red state” attorneys general recently announced they will appeal a federal court ruling challenging the Labor Department’s ESG rule.
Witness statements and a video link to the four-hour long hearing are available here.