February 28, 2023
Res. prohibiting retirement plan managers from considering ESG factors in investments (H.J.Res 30)
In 2022, the Department of Labor published a rule that managers of retirement investment plans could consider environmental, social and governance (ESG) factors when choosing investments for plan members. Although "ESG" is a relatively new term, it's not a new concept - retirement managers have invested using "socially responsible" strategies for decades, which are similar.
The Republican challenge to this rule is partly borne from classic partisan objections to environmental protection and improved corporate governance standards. However, more fundamentally, their opposition is based in ESG investing's general avoidance of shares in mining, weapons and tobacco companies - all large components of the Republican donor base.
Debate centered around Republican arguments that investment decisions should be entirely fiduciary, and ESG factors are a distraction. However, as illustrated above, ESG stocks actually deliver better returns on both a medium- and long-term basis. A vote for the bill is a vote against better investment performance for retirees.
This resolution passed by a party-line vote, 216-204. Molinaro voted FOR this bill.