Republican lawmakers aim to curb so-called “awakening investments” by forcing pension funds to focus purely on profits, even if conservative groups accuse pension managers of “politicizing” with American savings.
Rep. Andy Barr (R-Ky.) is to introduce a new bill to force retirement funds to focus on maximizing returns, rather than environmental, social and governance goals commonly known as ESG.
The law, known as the Sound Guidance Guarantee Act, does not ban investments entirely, but requires companies to disclose the difference between fees and returns between ESG-linked funds and rival indexes.
A source close to GOP lawmakers, who are senior members of the House Financial Services Committee. The draft text will be released later Wednesday, he said.
“American investors deserve financial advice based on sound economic principles, not on a political agenda,” Burr told the Post.
“The sound guidance law guarantees protect retail investors and retirement savings by reaffirming that financial advisors must prioritize financial returns rather than ESG trends.
“The law is to block politics from the portfolio and restore investor trust and fiduciary responsibility, which is essential for long-term economic growth.”
After former Commander-in-Chief Joe Biden rejected a bill passed in both the House and Senate, Barr's bid to oppose ESG was blocked in the previous administration.
The measures advocated by supporters, aimed at promoting social interests, but were lightning early in the 2024 presidential campaign.
One-time candidates Vivek Ramaswamy and Ron Desantis have accused the policy of being bad for the American investment portfolio.
The push to the Hardwire ESG bashing Act of federal law comes amidst the crackdown by state leaders on practice.
Barr's Kentucky home has signed Democratic government Andy Besher to sign one of the country's strictest anti-ESG laws, demanding that state retirement funds put profits first.
The legislator's bill came in the publication of a new report by conservative, unleashed prosperity co-authored by former Trump advisor Steve Moore.
The study denounced state pension funds across the country, obtained by the Post, for “politicizing on workers' pensions.”
The funds generally enjoy surveillance from state officials, saying they hold “$6 trillion in stock and 30 million American bondholders.”
California's largest state pension fund, the civil servant retirement plan, held $55 billion in assets as of June 2024, figures cited by Unleash Prosperity said.
Pension managers can vote for a set of ESG measures, according to the report, as there are large stakes in a variety of companies.
“Many state-run public pension funds support the proposals of radical activists who are often hostile to the interests of businesses and shareholders,” the study states. “The results will be less in the pockets of retirees.”
It cited an example of a net zero climate policy that claims to phase out fossil fuel or day employment quotas being attacked by the new Trump administration.
