Fight against 'woke' money managers emerges as a dominant issue in American politics
The movement to inject climate change and social justice politics into corporate boardrooms and investment strategies has suffered a series of setbacks in the past year, including getting shut out of a dozen states and getting pummeled by lawsuits and congressional investigations.
The road ahead gets rockier with the Republican-run House ready to swat down new federal rules to apply what is known as ESG to 401(k) investments.
The political left, meanwhile, isn’t giving up on institutionalizing this woke business ethos without a fight. Although armed with little more than public relations campaigns, liberal lawmakers have struggled to parry the Republican blitz against environmental, social and corporate governance investing, or ESG.
Opponents of ESG warn that climate change and other political considerations warp an asset manager’s fiduciary duty to yield the highest returns on investment, most notably companies’ environmental impact, potentially imperiling retirement plans and public pensions.
“Hell, I don’t want anybody who I’m turning my money over to have any consideration other than to give me the best return,” Sen.
Lawmakers are using the Congressional Review Act, a tool for overturning new federal rules with a simple majority vote in both the
“To be clear, the rule is not a mandate — it does not require any fiduciary to make investment decisions based solely on ESG factors,” the
It’s a numbers game in the
The Labor Department’s ESG 401(k) rule is also facing a lawsuit by 25 Republican-controlled states led by
“These asset managers are violating their fiduciary duties by failing to maximize their returns and instead push a partisan political agenda,”
Financial Services Committee Chairman
“We want to know from them what is going through their head when they’re doing this,”
He said to anticipate public hearings on ESG, testimony from investment firms about their climate-friendly strategies and informational sessions about a topic that is unfamiliar to many lawmakers from both sides of the aisle.
Myriad red states have enacted laws that pave the way for divesting public pensions and ceasing other government business with pro-ESG financial institutions that they deem anti-fossil fuel. More Republican-led states are eyeing similar proposals.
BlackRock, one of the world’s largest asset managers, and other firms deny that they are anti-fossil fuel despite their support of “climate-conscience” investment practices. BlackRock points as evidence to the more than
BlackRock responded to losing business because of its ESG stance with a public relations campaign. Other asset managers have tried to quell the ESG outrage by softening their positions. Late last year, Vanguard quit the world’s largest climate finance alliance known as the Net Zero Asset Managers initiative.
The caucus’ co-chairs, Reps.
“We’ve got to be honest: We are also creating this caucus for defensive reasons. One of the oldest rules in
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