Ginny Cleaveland, Deputy Press Secretary, Fossil-Free Finance, Sierra Club, ginny.cleaveland@sierraclub.org, 415-508-8498 (Pacific Time)
WASHINGTON, DC — The House of Representatives today voted in support of a Congressional Review Act (CRA) measure to nullify the Department of Labor’s (DOL) recent rule that restored the ability for managers of retirement plans to consider environmental, social, and corporate governance (ESG) factors when making investment decisions and voting on shareholder proposals. The Senate is expected to vote on the CRA measure later this week.
The DOL rule provides options for workers and retirees who want to ensure the fund managers of their pensions consider climate risks and provide options to invest in sustainable businesses. The DOL reinstated the rule in November 2022, undoing a push by the Trump administration to impose additional costs and burdens meant to discourage fund managers from considering climate change in their decision-making.
In response to the news, the Sierra Club reemphasized the importance of the DOL rule and encouraged the Senate to vote against the CRA measure. If both the House and Senate pass the CRA measure, the Sierra Club calls on President Biden to veto the measure and keep the DOL rule in place, which the administration said on Monday it would do.
“This resolution is part of a failing effort to imbue ESG with false meaning. The Department of Labor rule simply allows fund managers to consider all factors when assessing investment risk. It does not prohibit or encourage particular types of investments, as some Republican leaders falsely claim,” said Jessye Waxman, Senior Campaign Representative with the Sierra Club’s Fossil-Free Finance campaign. “Most investors know climate risk is financial risk, and this rule gives workers and retirees the ability to prepare for the impacts of climate change on their savings. A majority of Democrats and Republicans agree the government should not set limits on ESG investing. When it goes to a vote, Senate leaders would be wise to listen to their voters, not kowtow to the demands of fossil-fuel backed corporate interests.”
In February 2023, the Sierra Club joined dozens of investors, workers, and advocacy groups in sending a series of letters to House and Senate lawmakers opposing Republican attempts to circumvent the DOL rule.
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About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.