Federal Initiatives

Actions Restricting Use of ESG Considerations in Investment Decisions

State Government Employee Retirement Protection Act

• Status
  • Final version published (3/18/22)
  • Draft amendments introduced (4/6/22)

• Summary
  • Directs government pension plan fiduciaries to consider only pecuniary factors in their investment decisions and to weigh ESG factors solely according to their impact on economic risk and return.
  • Prohibits voting shares to promote non-pecuniary or non-financial goals.

Actions Targeting Entities that Boycott Fossil Fuel and/or Firearms/Ammunition Companies

Energy Discrimination Elimination Act

• Status
  • First draft introduced (7/29/21)
  • Second draft introduced (12/3/21)

• Summary 
  • No final version published.
  • Contains essentially the same provisions as Texas SB13 and Oklahoma HB2034, which were introduced about four months earlier. Slightly differing versions have been introduced in 2022 in Minnesota (HF4904, died in committee), Indiana (HB1224, died in committee) and Kentucky (SB205, passed 4/8/22).

Promote ESG Factors in Investment and/or Proxy Voting Decisions

House Judiciary Committee Ranking Members' Report -- Unsustainable and Unoriginal: How the Republicans Borrowed a Bogus Antitrust Theory to Protect Big Oil

• Status
  • Report released by minority members of the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust, which held a hearing on Wednesday, June 12, 2024 entitled, "Climate Control: Decarbonization Collusion in Environmental, Social, and Governance (ESG) Investing," which examined whether existing civil and criminal penalties and current antitrust law enforcement efforts are sufficient to deter anticompetitive collusion to promote ESG-related goals in the investment industry.

• Summary
  • This report prepared by House Democrats is a comprehensive analysis of the Judiciary Committee Chairman Jordan’s investigation so far. As this report explains, the legal theory underpinning the Republican investigation is a total sham. There is no theory of antitrust law that prevents private investors from working together to capture the risks associated with climate change. There is certainly no antitrust law that prevents investors from asking corporations how they plan to transition to a climate-resilient economy. To the extent that House Republicans have ever clearly articulated such an argument, as this report shows, they are plainly mistaken.

Democratic Lawmakers Create Sustainable Investment Caucus to Address ESG Investing

• Status
  • Announced (1/25/23)

• Summary
  • Announcing the launch of the Congressional Sustainable Investment Caucus, which will focus on informing policies related to ESG investing. To be co-chaired by Rep. Sean Casten, D-IL, and Rep. Juan Vargas, D-CA. Additional members include Reps. Bill Foster, D-IL.; Raúl Grijalva, D-AZ; and Emmanuel Cleaver, D-MO.

H.R.4759 - Environmentally Sustainable Growth Act of 2023

• Status
  • Introduced by Rep. Vargas (D-CA) & referred to the House Committee on Financial Services (7/19/23)

• Summary
  • A bill to provide for disclosure of additional material information about public companies, and for other purposes. Requires audited financial statements, disclosure of environmental, social, and governance metrics, and definition of ESG metrics.

H.R.1261 - Federal Employees Sustainable Investment Act

• Status
  • Introduced by Rep. Schiff (D-CA) & referred to the House Committee on Oversight and Accountability (2/28/23)

• Summary
  • Provides for a corporate responsibility investment option under the Thrift Savings Plan, accounting for a minimum of certain enumerated ESG factors (corporate governance, environmental practices, workplace relations & benefits, product safety & impact, international operations & human rights, involvement with repressive regimes, community relations).

H.R.1119 - Freedom to Invest in a Sustainable Future Act

• Status
  • Introduced by Rep. DelBene (D-WA) & referred to the House Committee on Education and the Workforce (2/21/23)

• Summary

  • Freedom to Invest in a Sustainable Future Act. A bill to amend the Employee Retirement Income Security Act of 1974 to permit retirement plans to consider certain factors in investment decisions.

Actions Promoting Integration of ESG Considerations in Investment Decisions

SB 523: Freedom to Invest in a Sustainable Future Act

• Status
  • Read twice and referred to Committee on Health, Education, Labor, and Pensions (2/16/23)

• Summary
  • Introduced by Senator Tina Smith (D-MN). Codifies the Department of Labor's new ESG rule.
  • Amends ERISA to permit retirement plan fiduciaries to consider ESG factors when selecting investments. Permits plans to consider ESG factors as tie-breakers when deciding between otherwise comparable options.

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

Judiciary Committee Probes 60+ Companies over ESG Ties

• Status
  • Letters sent by House Judiciary Committee requesting information from over 60 companies and nonprofits who are members of Net Zero Asset Managers
    
    
• Summary
  •  Letter requests the following:
    1. As an investor signatory of NZAM, Acadian Asset Management has “commit[ed]” to “[i]mplement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with Acadian Asset Management’s ambition for all assets under management to achieve net zero emissions by 2050 or sooner.”11 How has Acadian Asset Management’s membership in GFANZ and NZAM altered its “stewardship and engagement strategy” with its portfolio companies, including, but not limited to, updates or other changes to its “stewardship and engagement strategy” with its portfolio companies after joining GFANZ and NZAM?
    2. How has Acadian Asset Management’s membership in GFANZ and NZAM altered its “escalation and voting policy” with its portfolio companies, including, but not limited to, updates or other changes to its “escalation and voting policy” with its portfolio companies after joining GFANZ and NZAM??
    3. How are Acadian Asset Management’s “engagement strategy” and “escalation and voting policy” consistent with “achiev[ing] net zero emissions by 2050 or sooner” for “all assets under management”?
    4. As an investor signatory of NZAM, Acadian Asset Management has “commit[ed]” to “[p]rioriti[z]e the achievement of real economy emissions reductions within the sectors and companies in which [it] invest[s]” in order to “reach net zero emissions by 2050 or sooner across all assets under management . . . .”12 What specific actions has Acadian Asset Management taken to “[p]rioriti[z]e the achievement of real economy emissions reductions within the sectors and companies in which [it] invest[s]” in order to “reach net zero emissions by 2050 or sooner across all assets under management . . . .”?
    Please provide responses to the Committee’s requests as soon as possible but by no later than January 10, 2025, at 12:00 p.m. 
    Further, as an NZAM signatory, the Committee has reason to believe that Acadian Asset Management may be in possession of documents and communications related to GFANZ and NZAM’s collusive activity that would inform potential legislative reforms. Accordingly, the Committee requests that Acadian Asset Management preserve the following materials from the time period beginning January 1, 2020:
    1. All documents and communications referring or relating to Acadian Asset Management’s role as a member of GFANZ and NZAM;
    2. All documents and communications referring or relating to Acadian Asset Management’s coordination or interactions with GFANZ, NZAM, or investor signatories; and 
    3. All documents and communication referring or relating to Acadian Asset Management’s participation in ESG-related organizations or initiatives.
    
     

McHenry, Barr Request GAO Probe on Biden-Harris Financial Regulators’ Ties to Network for Greening the Financial System

• Status
  • Letter sent by House Financial Services Committee Chair and Monetary Policy Subcommittee Chair to Comptroller General requesting information on federal banking agencies’ memberships in the Network of Central Banks and Supervisors for Greening the Financial System (NGFS)
    
    
• Summary
  • Letter requests the following:
    We respectfully request that the GAO assist the Committee in gaining greater transparency into the opaque interrelationships between the Federal Reserve System, FDIC, OCC, and the global governance body called the NGFS. To that end, please consider the additional background information provided in the Appendix and the following questions that require answers:
    1. What record-keeping protocols and information-sharing controls are in place at the Federal Reserve, FDIC, and OCC for collaborative work between agency staff and NGFS
    participants and associated funding organizations?
    a. Are minutes or notes of collaborations and meetings kept as records?
    b. Is there a regular reporting regime in place for Federal Reserve Board Members, FDIC Board Members, and the Acting Comptroller to be made aware of what staff at the
    respective agencies are doing at the NGFS, or with associated funding organizations, and how many agency resources are being utilized?
    c. Why is there such little information available to Congress and the American people?
    2. Do the Federal Reserve, Federal Reserve district banks, the FDIC, or OCC, have confidentiality agreements with the NGFS?
    3. Do any officials or staff from the Federal Reserve, Federal Reserve district banks, the FDIC, or OCC share U.S. confidential supervisory information with anyone at the NGFS or
    affiliated with the NGFS? How is Congress to know? 
    4. How do the Federal Reserve, FDIC, or OCC intend to gauge large bank adhesion to the agencies’ “principles” for managing purported climate-related financial risks, including how
    “plausibility” of possible speculative climate and economic scenarios is to be measured, while at the same time avoiding being arbitrary and capricious in monitoring regulated
    entities adherence to consideration of whatever are plausible futures?
    5. How do the Federal Reserve, OCC, and FDIC internally calculate the definition of climate “transition risk” that is then shared with the NGFS and incorporated into material risks facing
    financial institutions, including legal, operational, reputational, and credit risks?
    6. Do officials from the Federal Reserve’s opaque Supervision Climate Committee (SCC), which was established somewhere around March 2021 and continues presently without any
    acknowledgement on the Federal Reserve’s website or public documents, regularly meet with NGFS participants and their associated funding sponsors and devote U.S. resources within NGFS workstreams? How are Congress and the American people supposed to know?
    7. Same questions as in 4 above, except applied to officials from the Federal Reserve’s opaque Financial Stability Climate Committee (FSCC).
    8. How many meetings have Federal Reserve System officials and researchers had with NGFS officials and researchers, including in joint research efforts, since formally joining the NGFS in December of 2020?
    a. Similarly for the OCC since joining the NGFS in 2021.
    b. Similarly for the FDIC since joining the NGFS in 2022.
    9. Are there any records of the formal applications to join the NGFS, as required by Article 3i of the NGFS charter, submitted by the Federal Reserve, the FDIC, and the OCC, along with
    the information required by the NGFS in Article 3i to accompany the application?
    10. Can any federal banking regulator—most notably, the Federal Reserve, a Federal Reserve district bank, the FDIC, and the OCC—join any international, self-chartered interest group
    that it wants, including those that base their existence on a global gathering of special interests?
    11. How much funding has the NGFS obtained from China, including the NGFS-Member People’s Bank of China, and what workstreams, projects, or other expenses were and
    continue to be funded?
    a. Similarly for funding the NGFS has obtained from the Russian Federation, including the NGFS-Member Bank of Russia. 
    
     

Jordan and Massie Demand Information From Over 130 Companies Surrounding Their Involvement with Woke ESG Cartel Climate Action 100+

• Status
  • Letters sent by House Judiciary Committee to over 130 companies and nonprofits requesting information
    
    
• Summary
  • Letters request the following:
    1. Under Climate Action 100+’s recently announced Phase Two, investor signatories “ask companies to not only disclose but to implement robust transition plans and to take action with a wider set of stakeholders to address the sectoral barriers to the net zero transition.” Specifically, investor signatories are required to “[t]ake action to  reduce greenhouse gas emissions across the value chain.” How does [Company] plan to engage the Climate Action 100+ focus companies in its  portfolio to “[t]ake action to reduce greenhouse gas emissions across the value chain”? 
    2. What requests will [Company] make of the Climate Action  100+ focus companies in its portfolio to “[t]ake action to reduce greenhouse gas  emissions across the value chain”? 
    3. What tactics will [Company] use to encourage the Climate  Action 100+ focus companies in its portfolio to agree to its requests?
    4. How does [Company] plan “to take action with a wider set  of stakeholders to address the sectoral barriers to the net zero transition”?
    Please provide responses to the Committee’s requests as soon as possible, but by no later than August 13, 2024, at 12:00 p.m. 
    
    Further, as a Climate Action 100+ signatory, the Committee has reason to believe that [Company] may be in possession of documents and communications related to Climate Action 100+’s collusive activity. Accordingly, the Committee requests that [Company] preserve the following materials:
    1. All documents and communications referring or relating to the company’s role as an investor signatory of Climate Action 100+;
    2. All documents and communications referring or relating to the company’s coordination or interactions with Climate Action 100+, investor signatories, or focus  list companies; and 
    3. All documents and communication referring or relating to the company’s efforts to advance ESG-related goals.
    

Letter to Federal Reserve General Counsel re: ESG Investing

• Status
  • Sent by House Oversight Jim Comer to Mark Van Der Weide (Fed GC) on 2/26/24

• Summary 
  • As part of the House Committee on Oversight and Accountability's ongoing review of the integration of ESG policies across the U.S. economy, it is examining whether certain asset managers are in breach of agreements with the Federal Reserve System, and how the broader asset management industry may be subject to the Bank Holding Company Act, the Home Owners Loan Act, and the Change in Bank Control (CIBC) Act as a result of ESG related pledges and actions taken pursuant to those pledges. 
  • The House Committee submitted a letter to the GC of the Federal Reserve to request additional information in light of prior determination letters related to this issue
  • The letter requests a response by March 11, 2024 to a series of 12 questions, including, among other things, (i) Were [Fed staff] made aware of the pledges and the accompanying actions the companies are taking to fulfill them when granting the determination letter? (ii) Have the companies made the Fed Staff aware after receiving a determination letter that they entered into these agreements and the associated actions required of signatories? (iii)  Does the Federal Reserve Board and/or its staff monitor the ongoing activities of the asset management industry to determine if their stewardship engagement triggers requirements under the BHC Act, HOLA, the CIBA Act or any other statute? (iv)  Does the Federal Reserve Board and/or its staff monitor the ongoing activities of the asset management industry to determine if their stewardship engagement triggers requirements under the BHC Act, HOLA, the CIBA Act or any other statute?
    
     

H.R.7780 - Safeguarding Investment Options for Retirement Act

• Status
  • Introduced by Rep. Murphy (R-NC) & referred to the House Committee on Ways and Means (3/21/2024).

• Summary 
  • Would amend Sections 401(a), 403 and 457 of the Internal Revenue Code to provide that the ‘exclusive benefit’ standard requires that investment decisions only be made on the basis of financial risk and return factors. 
  • Would apply to tax-advantaged Section 401 plans, annuities, state and local retirement plans, and certain non-profit organizations. 
    
     

House Judiciary Committee Report -- Climate Control: Exposing the Decarbonization Collusion in ESG Investing

• Status
  • Report prepared for the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust, which held a hearing on Wednesday, June 12, 2024 entitled, "Climate Control: Decarbonization Collusion in Environmental, Social, and Governance (ESG) Investing," which examined whether existing civil and criminal penalties and current antitrust law enforcement efforts are sufficient to deter anticompetitive collusion to promote ESG-related goals in the investment industry

• Summary 
  • According to the report's executive summary, the House Judiciary Committee has obtained evidence that a “climate cartel” of left-wing environmental activists and major financial institutions has colluded to force American companies to “decarbonize” and reach “net zero.” Through their commitments to groups such as Climate Action 100+, the members of the climate cartel expressly have agreed to decarbonize the American economy by forcing corporations to disclose their carbon emissions, to reduce their carbon emissions, and to enforce (and reinforce) their disclosure and reduction commitments by handcuffing company leadership and muzzling corporate free speech and petitioning. The climate cartel imposes these radical policies by weaponizing ever-escalating pressure tactics that start with negotiations with corporate management, continue to filing and “flagging” stockholder proxy resolutions, and culminate with taking out the boards of directors at “recalcitrant companies.”
  • The climate cartel’s members include: (i) convening and collaborating groups like Climate Action 100+, the Net Zero Asset Managers initiative, and the Glasgow Financial Alliance for Net Zero; (ii) blue state pension funds like the California Public Employees’ Retirement System; (iii) radical environmental non-profit organizations like Ceres; (iv) stockholder engagement service providers like As You Sow; (v) activist investors like Arjuna Capital, LLC, Trillium Asset Management, LLC, Engine No. 1 LP, and Aviva Investors Americas, LLC; (vi) the “Big Three” asset managers BlackRock, Inc, State Street Global Advisors, and The Vanguard Group, Inc., who together own 21.9% and vote 24.9% of the shares of the S&P 500; and (vii) the foreign-owned proxy advisory duopoly of Institutional Shareholder Services Inc. and Glass, Lewis & Co., which have a combined 90% market share and advise mutual funds controlling more than $27 trillion in assets.
    
     

Letter to SEC Chair re: European ESG Initiatives

• Status
  • Published by James Comer (R-KY) on 10/13/23

• Summary 
  • Demands the information that the House Committee on Oversight and Accountability had requested in June regarding the SEC's involvement in developing European ESG initiatives "disguised as disclosure and due diligence directives being developed by the European Union"
  • Threatens compulsory action if no response by October 19, 2023 
    
     

H.R.4655

• Status
  • H.R. 4655 introduced by Rep. Norman [R-SC-5] (7/14/23); referred to the Committee on Financial Services;
  • 7/27/2023: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 21

• Summary 
  • To amend the Securities Exchange Act of 1934 to prohibit the Securities and Exchange Commission from compelling the inclusion or discussion of shareholder proposals or proxy or consent solicitation materials, and for other purposes.

H.R.4657

• Status
  • H.R. 4657 introduced by Rep. Rose (R-TN) (7/14/23); Referred to the House Committee on Financial Services.

• Summary 
  • To clarify that an issuer may exclude a shareholder proposal pursuant to section 240.14a-8(i) of title 17, Code of Federal Regulations, without regard to whether such proposal relates to a significant social policy issue.

H.R.4648

• Status
  • H.R. 4648 introduced by Rep. Loudermilk (R-GA) (7/14/23); Referred to the House Committee on Financial Services.

• Summary 
  • To amend the Securities Exchange Act of 1934 to provide for duties of certain investment advisors, asset managers, and pension funds with respect to voting on shareholder proposals, and for other purposes.

H.R.4625 - Protecting U.S. Business Sovereignty Act

• Status
  • H.R. 4625 introduced by Rep. Meuser (R-PA) (7/13/23); Referred to the Committee on Foreign Affairs.

• Summary 
  • Would require the US Comptroller General to conduct a study examining the detrimental impact and potential detrimental impact of each of the corporate sustainability due diligence/reporting directives adopted by the EU on US companies, consumers, and investors. Related to HR4653.

H.R.3406 - Stop TSP ESG Act

• Status
  • H.R. 3406 introduced by Rep. Buck (R-CO-4) (5/17/23)

• Summary 
  • "To amend title 5, United States Code, to prohibit qualified professional asset managers from exercising voting rights associated with the ownership of securities by the Thrift Savings Fund."

Subpoena to As You Sow

• Status
  • Sent by Jim Jordan to Andrew Behar (CEO of As You Sow) on 11/1/23

• Summary 
  • Demand for production by 12/1/23 of information regarding potential facilitation of "collusion to promote ESG goals" and therefore potential violations of U.S. antitrust law, citing As You Sow's membership in Climate Action 100+.

H.R.5894 - Making appropriations for the Departments of Labor, Health and Human Services, and Education, and related agencies for the fiscal year ending September 30, 2024, and for other purposes.

• Status
  • H.R. 5894 introduced by Rep. Aderholt (R-AL) (10/6/23)
  • 11/15/2023: Postponed proceedings

• Summary 
  • The proposed budget would prohibit the DOL from using federal funds to administer, implement, or enforce the DOL's Final ESG Rule.

H.R.5893 - Commerce, Justice, Science, and Related Agencies Appropriations Act, 2024

• Status
  • H.R. 5893 introduced by Rep. Rogers (R-KY) (10/6/23)
  • 10/25/2023: Referred to the Committees on Appropriations and the Budget
  • 11/14/2023: Rules Committee Resolution H. Res. 869 Reported to House. Provides for consideration of H.R. 5893, under a structured rule with one hour of general debate and one motion to recommit.

• Summary 
  • The latest draft of the 2024 appropriations bill for the Departments of Commerce and Justice, Science, and Related Agencies  prohibits the use of funds to promote or contribute to environmental, social, and corporate governance (ESG) investments.

H.R.5340 - Providing Complete Information to Retirement Investors Act

• Status
  • H.R. 5340 introduced by Rep. Banks (R-IN-3) (9/5/23); referred to the Committee on Education and the Workforce
  • 9/14/2023: Ordered to be Reported (Amended) by the Yeas and Nays: 23 - 19
  • 9/26/2023: Reported (Amended) by the Committee on Education and the Workforce; Placed on the Union Calendar, Calendar No. 183

• Summary 
  • Implements a notice requirement on defined contribution plans explaining the difference between choosing from investments selected by ERISA fiduciaries and choosing from investments through a brokerage window.

H.R.5339 - RETIRE Act

• Status
  • H.R. 5339 introduced by Rep. Allen (R-GA-12) (9/5/23); referred to the Committee on Education and the Workforce
  • 9/14/2023: Ordered to be Reported (Amended) by the Yeas and Nays: 23 - 19
  • 9/26/2023: Reported (Amended) by the Committee on Education and the Workforce; Placed on the Union Calendar, Calendar No. 184
  • 9/18/2024: Passed the House.
  • 9/19/2024: Received in Senate; referred to Committee on Banking, Housing, and Urban Affairs.

• Summary 
  • Roll back ESG To Increase Retirement Earnings Act (RETIRE Act). Clarifies that financial institutions must base decisions on an investment solely on economic factors.

H.R.5338 - No Discrimination in My Benefits Act

• Status
  • H.R. 5338 introduced by Rep. Good (R-VA-5) (9/5/23); referred to the Committee on Education and the Workforce
  • 9/14/2023: Ordered to be Reported (Amended) by the Yeas and Nays: 23 - 19
  • 9/26/2023: Reported (Amended) by the Committee on Education and the Workforce; Placed on the Union Calendar, Calendar No. 185

• Summary 
  • To amend the Employee Retirement Income Security Act of 1974 to establish that fiduciaries must act with prudence and loyalty when selecting service providers for pension plans.

H.R.5337 - Retirement Proxy Protection Act

• Status
  • H.R. 5337 introduced by Rep. Houchin (R-IN-9) (9/5/23); referred to the Committee on Education and the Workforce
  • 9/14/2023: Ordered to be Reported (Amended) by the Yeas and Nays: 23 - 19
  • 9/26/2023: Reported (Amended) by the Committee on Education and the Workforce; Placed on the Union Calendar, Calendar No. 186

• Summary 
  • States that the decision to exercise a shareholder right is subject to the prudence and loyalty duties under ERISA. It also states that proxies held by ERISA plans must be voted in the economic interest of the plan, not used to advance radical policies.

CalPERS hands over trove of climate-related documents demanded by House GOP

• Status
  • Ongoing since December 2022, article published 8/17/2023

• Summary 
  • In response to alleged coordination between CalPERS, Ceres, and Climate Action, 100+ House Republicans are requiring the California Public Employees' Retirement System to turn over “thousands of pages of documents” related to its climate-related investment practices to the House Judiciary Committee, led by Rep. Jim Jordan (R-OH).

H.R.4790 - Guiding Uniform and Responsible Disclosure Requirements and Information Limits Act of 2023

• Status
  • H.R. 4790 introduced by Rep. Huizenga (R-MI) (7/20/23); referred to the Committee on Financial Services;
  • 7/27/2023: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 21
  • 9/19/2024: Passed the House.
  • 9/23/2024: Received in Senate; referred to Committee on Banking, Housing, and Urban Affairs.

• Summary 
  • Would require the SEC to conduct a study to examine and evaluate—
    (1) the detrimental impact and potential detrimental impact of each of the Directives on—
    (A) United States companies, consumers, and investors; and
    (B) the economy of the United States;
    (2) the extent to which each of the Directives aligns with international conventions and declarations on human rights and environmental obligations; and
    (3) the legal basis for the extraterritorial reach of each of the Directives

H.R.4767 - Protecting Americans’ Retirement Savings from Politics Act

• Status
  • H.R. 4676 introduced by Rep. Steil (R-WI) (7/20/23); referred to the Committee on Financial Services;
  • 7/27/2023: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 21

• Summary 
  • It would require the registration of proxy advisors, amend Exchange Act 13(f) to require institutional investment managers to make certain disclosures regarding their use of proxy advisors, and include certain new disclosure requirements for IIMs, and amend the Advisers Act to create a new category of “passively managed funds” for which advisers are instructed to either (a) vote in accordance with the beneficial owner’s instructions; (b) vote in accordance with the operating company’s recommendation; or (c) abstain from voting (subject to a safe harbor for non-routine matters).  It also would amend the Advisers Act to define best interest as limited to those using pecuniary factors, which may not be subordinated to or limited to non-pecuniary factors absent written consent.

H.R.4664 - Making appropriations for financial services and general government for the fiscal year ending September 30, 2024, and for other purposes.

• Status
  • H.R. 4664 introduced by Rep. Womack (R-AR) (7/17/23)
  • Pursuant to clause 1(c) of rule XIX, the Chair announced further proceedings on H.R. 4664 would be postponed. (11/9/23)

• Summary 
  • A bill making appropriations for financial services and general government for the fiscal year ending September 30, 2024, and for other purposes. Sec. 754.  None of the funds made available by this Act, or any other Act, may be used to make investments under the Thrift Savings Plan in certain mutual funds that make investment decisions based primarily on environmental, social, or governance criteria.

H.R.4640 - To authorize the exclusion of shareholder proposals from proxy or consent solicitation material if the subject matter of the shareholder proposal is environmental, social, or political.

• Status
  • H.R. 4640 introduced by Rep. Donalds (R-FL) (7/14/23); Referred to the House Committee on Financial Services.

• Summary 
  • "A shareholder proposal submitted to an issuer pursuant to section 240.14a–8 of title 17, Code of Federal Regulations, may be excluded by an issuer from its proxy or consent solicitation material for a meeting of the shareholders of such issuer if the subject matter of the shareholder proposal is environmental, social, or political (or a similar subject matter)."

H.R.4600 - Protecting Retail Investors Savings Act

• Status
  • H.R. 4600 introduced by Rep. Barr (R-KY) (7/13/23); Referred to the Committee on Financial Services.

• Summary 
  • A bill to amend the Investment Advisers Act of 1940 to specify requirements concerning the consideration of pecuniary and non-pecuniary factors, to require the Securities and Exchange Commission to conduct a study on climate change and other environmental disclosures in the municipal bond market, and to require the Securities and Exchange Commission to conduct a study on the solicitation of municipal securities business.

House Republicans Launch Investigation Into BlackRock, Vanguard, Others Over ESG Practices

• Status
  • Published (7/6/23)
  • 12/11/2023: Subpoena issued against Vanguard Group

• Summary

  • Republican Congressman Jim Jordan (OH), joined by his colleagues Thomas Massie (KY) and Dan Bishop (NC), sent four letters to the heads of Glasgow Financial Alliance for Net Zero, BlackRock, State Street, and Vanguard.

  • In the letters, the Representatives claim that the entities are potentially violating federal antitrust law through their pro-ESG actions and argue that reaching net-zero emissions would be harmful to Americans and the coal, gas, and oil industries.

H.R.4237 - To amend the Investment Advisers Act of 1940 and the Employee Retirement Income Security Act of 1974 to specify requirements concerning the consideration of pecuniary and non-pecuniary factors.

• Status
  • H.R. 4237 introduced by Rep. Barr (R-KY) (6/21/23); Referred to the Committee on Financial Services, and in addition to the Committee on Education and the Workforce

• Summary 

  • It would amend ERISA to specify that a retirement plan fiduciary shall be considered acting solely in the interest of the participants and beneficiaries only if: 1) the investment does not subordinate the interests of the participants and beneficiaries in their retirement income or financial benefits under the plan to other objectives, including ESG objectives; and 2) the fiduciary does not sacrifice investment return or take on additional investment risk to promote goals unrelated to the plan or purposes of the plan.

  • It would permit investment options that use “non-pecuniary” factors to be used in a brokerage window, provided certain conditions are met. It also would permit ESG factors to be considered through a “tiebreaker test,” but would require stringent documentation requirements among fiduciaries similar to the 2020 Trump ESG Rules. Also similar to the 2020 Rule, it would prohibit non-pecuniary ESG factors from being used for default investment options.

H.R. 3612 - No ESG at TSP Act

• Status
  • H.R. 3612 introduced by Rep. Roy (R-TX) (5/23/23)

• Summary 
  • Rep. Roy was joined by 7 Republican colleagues in introducing the “No ESG at TSP Act” to prevent the federal Thrift Savings Plan (TSP) from offering some ESG-themed funds to its participants. The legislation would prohibit TSP from allowing participants to invest their retirement savings into funds that make investment decisions based on environmental, social, governance, or political criteria. TSP is the largest defined contribution plan in the world and benefits federal employees and servicemembers. The legislation addresses the relatively new mutual fund window that is available to the roughly 6.5 million government workers who participate in the TSP.

H.J.Res.30: Providing for Congressional Disapproval of the DOL’s Final ESG Rule

• Status
  • H.J. Res. 30 introduced by Rep. Barr (R-KY) and Sen. Braun (R-IN) (2/7/23)
  • House approved the CRA resolution on a near party-line vote of 216-204 (2/28/23)
  • Passed in the Senate (3/1/23)
  • President Biden vetoed (3/20/23)
  • House Republicans failed to get the necessary two-thirds vote to override President Biden’s veto (3/23/23)

• Summary 
  • Resolution that Congress disapproves of the DOL’s final rule relating to “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” and declares that such rule shall have no force or effect.
  • President Biden vetoed H.J. Res. 30, stating: “Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country. That is not controversial — that is common sense.” 

H.R.1506 - Advisory Committees Free of ESG Act of 2023

• Status
  • Introduced by Rep. Jackson (R-TX) & referred to the House Committee on Oversight and Accountability (3/9/23)

• Summary 
  • Prohibits the establishment of ESG-related or ESG-based advisory committees.
  • Provides for the immediate termination of any advisory committee that has been authorized, permitted, or implemented. 

HR448: Putting Investors First Act of 2023

• Status
  • Introduced and referred to Committee on Financial Services (1/24/23)

• Summary 
  • Requires an investment company that holds itself out as offering an index fund where investments are made pursuant to ESG standards to disclose in tabular form the annual returns and fees charged to investors compared with that of comparable broad-based index fund offered by such investment company without ESG standards, or a reasonably similar comparison to a readily comparable broad-based index fund.
  • Requires the SEC to study and report to the Congress on shareholder proposals and proxy advisory firms that includes the costs that issuers incurred in responding to politically, environmentally, or socially motivated shareholder proposals.

Letter to SEC Chair on ESG

• Status
  • Published (1/13/23)

• Summary 
  • Republican Congressman John Rose (TN-06), a Member of the House Financial Services Committee, joined by his colleague Pete Sessions (TX-17) and Bryan Steil (WI-01), sent a letter to SEC Chair Gary Gensler criticizing recent SEC changes called “stakeholder capitalism.”
  • In the letter, the Members cite a steep decline in the success rate of no-action requests – especially those related to ESG issues.

H.Res.32 - Supporting the current definition of materiality in the securities laws and opposing new disclosure requirements outside the core mission of the Securities and Exchange Commission.

• Status
  • Introduced by Rep. Joyce (R-OH) & referred to the House Committee on Financial Services (1/12/23)

• Summary 
  • RESOLUTION supporting the current definition of materiality in the securities laws and opposing new disclosure requirements outside the core mission of the Securities and Exchange Commission. 

Target Entities That Boycott Certain Industries

H.R.4653 - Protecting U.S. Business Sovereignty Act

• Status
  • H.R. 4653 introduced by Rep. Meuser (R-PA) (7/14/23); Referred to the House Committee on Financial Services.

• Summary 
  • Would require the US Comptroller General to conduct a study examining:  The detrimental impact and potential detrimental impact of each of the directives adopted by the EU on US companies, consumers, and investors, as well as the economy of the US. it provides that the Comptroller General may request information from private entities to retrieve relevant data and information necessary to conduct the study. 

H.R.4652 - Public Company Advisory Committee Act of 2023

• Status
  • H.R. 4652 introduced by Rep. Lucas (R-OK) (7/14/23); Referred to the House Committee on Financial Services.

• Summary 
  • Creates the Public Company Advisory Committee to provide advice to the SEC on its rules, regulations, and policies as they relate to issues related to public reporting and corporate governance of public companies, issues related to the proxy process for shareholder meetings, trading in securities of public companies, issues related to capital formation, and existing or emerging regulatory priorities of the SEC.

ESG Part I: An Examination of Environmental, Social, and Governance Practices with Attorneys General

• Status
  • Announced (5/3/23)

• Summary 
  • House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) organized a full committee hearing on May 10, 2023 to examine the concerns of state attorneys general related to the integration of ESG standards by asset managers and how these ESG principles are being used. Witnesses included: Sean Reyes, Attorney General of Utah, Steve Marshall, Attorney General of Alabama, and Michael Frerichs (Minority Witness), Illinois State Treasurer. 

Comer Announces Hearing on Damaging ESG Practices with Attorneys General

• Status
  • Announced (5/3/23)

• Summary 
  • House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) will hold a full committee hearing on May 10, 2023 to examine the concerns of state attorneys general related to the integration of ESG standards by asset managers and how these ESG principles are being used.
  • Witnesses include Sean Reyes, Attorney General of Utah, and Steve Marshall, Attorney General of Alabama. 
    
     

HR53: Firearm Industry Non-Discrimination Act

• Status
  • Introduced and referred to Committee on Oversight and Accountability (1/9/23)

• Summary 
  • Prohibits the Federal Government from entering into contracts with an entity that discriminates against firearm or ammunition industries, and for other purposes, except for a contract for the procurement of goods or services that is a sole-source contract.

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

S. [X] - Restoring Integrity in Fiduciary Duty Act 

• Status
  • Introduced by Sen. Cassidy (R-LA) (9/26/24)
    
    
• Summary
  • Amends ERISA to prohibit fiduciaries from considering ESG factors

S.2005 - Mandatory Materiality Requirement Act of 2023

• Status
  • S. 2005 introduced by Rep. Rounds (R-SD) (6/15/23);  referred to the Committee on Banking, Housing, and Urban Affairs

• Summary 
  •  Amends the Securities Exchange Act of 1934 to require that an issuer is only obligated to disclose information to the SEC that it finds to be material to an investment or voting decision regarding securities. Related to HR4168.

Actions Restricting Use of ESG Considerations in Investment Decisions

S.3179 - Stop Woke Investing Act

• Status
  • S. 3179 introduced by Rep. Schmitt (R-MO) (11/1/23); read twice and referred to the Committee on Banking, Housing, and Urban Affairs

• Summary 
  • A bill to require the Securities and Exchange Commission to amend a rule of the Commission relating to shareholder proposals, and for other purposes.

S.1563 - Maximize Americans' Retirement Security Act

• Status
  • S. 1563 introduced by Rep. Braun (R-IN) (5/11/23);  referred to the Committee on Health, Education, Labor, and Pensions

• Summary 
  • A bill "to amend the Employee Retirement Income Security Act of 1974 to clarify the fiduciary duty of plan administrators to select and maintain investments based solely on pecuniary factors, and for other purposes. … when choosing between or among investment alternatives that a fiduciary is unable to distinguish on the basis of pecuniary factors alone, the fiduciary may use non-pecuniary factors as the deciding factor in the selection or maintenance of an investment if the fiduciary furnishes to participants documentation" on a few requirements.

S.2282 -Ensuring Sound Guidance Act

• Status
  • S. 2282 introduced by Rep. Cotton (R-AR) (7/12/23);  referred to the Committee on Banking, Housing, and Urban Affairs

• Summary 
  • A bill to amend the Investment Advisers Act of 1940 and the Employee Retirement Income Security Act of 1974 to specify requirements concerning the consideration of pecuniary and non-pecuniary factors, and for other purposes.

S.2147 - A bill to amend title 5, United States Code, to prohibit investments under the Thrift Savings Plan in certain mutual funds that make investment decisions based primarily on environmental, social, or governance criteria, and for other purposes.

• Status
  • S. 2147 introduced by Rep. Lee (R-UT) (6/22/23);  referred to the Committee on Homeland Security and Governmental Affairs

• Summary 
  • No text or summary yet available.

S.1891 - Stop TSP ESG Act

• Status
  • S. 1891 introduced by Rep. Cruz (R-TX) and referred to Committee on Oversight and Accountability (6/8/23)

• Summary 
  • A bill "to amend title 5, United States Code, to prohibit qualified professional asset managers from exercising voting rights associated with the ownership of securities by the Thrift Savings Fund."

S.1799 - Putting Investors First Act of 2023

• Status
  • S. 1799 introduced by Rep. Hagerty (R-TN) (6/1/23); referred to the Committee on Banking, Housing, and Urban Affairs.

• Summary 
  • Amends the Securities Act of 1933. Any covered entity that retains the services of a proxy advisory firm with respect to the preceding year shall provide to the beneficiaries and customers of the covered entity, as applicable, a report that includes the percentage of votes cast on environmental-, social-, or governance-related shareholder proposals that follow proxy advisory firm recommendations for each proxy advisory firm retained by the covered entity.

Letter to the Department of Treasury concerning the Federal Insurance Office’s ESG agenda

• Status
  • Published (5/2/23)

• Summary 
  • Republican Senators from various states led by Sen. Grassley (Iowa) issued a letter to Janet Yellen, the U.S. Department of the Treasury Secretary, "raising concerns with the Federal Insurance Office’s (FIO’s) efforts to force the Biden administration’s unrealistic environmental, social, and governance (ESG) agenda onto the state-regulated insurance industry." They believe such move "could result in state insurance regulators and insurers being coerced into adopting costly, one-size-fits-all climate-mitigation strategies."

SB428: Firearm Industry Non-Discrimination Act

• Status
  • Read twice and referred to Committee on Homeland Security and Governmental Affairs (2/15/23)

• Summary 
  • Prohibits the U.S. government from entering into contracts with an entity that discriminates against firearm or ammunition industries, and for other purposes. Excludes a contract for the procurement of goods or services that is a sole-source contract.

S.J.Res.8: A joint resolution providing for congressional disapproval of the DOL’s Final ESG Rule

• Status
  • Announced (2/1/23)
  • Read twice and referred to the Committee on Health, Education, Labor, and Pensions (2/7/23)

• Summary 
  • Introduced by all Republican Senators and Democrat Joe Manchin (WV). Same as H.J.Res.30 above.
  • Resolution that Congress disapproves of the DOL’s final rule relating to “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” and declares that such rule shall have no force or effect.

Letter to Law Firms Warning about ESG Initiatives

• Status
  • Published (11/4/22)

• Summary 
  • Republican Senators from 5 states including: Sens. Cotton (Arkansas), Rubio (Florida), Grassley (Iowa), Blackburn (Tennessee), and Lee (Utah) issued letters to 51 law firms warning of the possible antitrust violations these law firms’ clients may commit if they pursue ESG initiatives and requesting the law firms to preserve relevant documents for Congress’s oversight.

Actions Promoting Integration of ESG Considerations in Investment Decisions

Final Rule: Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights

• Status
  • Published (10/13/21)
  • Comment period closed (12/31/21)
  • Published (12/1/22), most provisions became effective on 1/30/23, and certain provisions pertaining to exercises of shareholder rights will become effective on 12/1/23.

• Summary
  • Clarifies that a plan fiduciary’s determination with respect to an investment or investment course of action must be based on factors that the fiduciary reasonably determines are relevant to a risk and return analysis, and that such factors may include the economic effects of climate change and other ESG factors on the particular investment or investment course of action.
  • Applies the same standard to qualified default investment alternatives (QDIAs) as to other investments—i.e., a focus on relevant risk-return factors.
  • Confirms that when a fiduciary has prudently concluded that competing investments equally serve the financial interests of the plan over the appropriate time horizon (also known as the tie-breaker scenario), the fiduciary is not prohibited from selecting the investment or investment course of action based on collateral benefits other than investment returns.