[Congressional Record Volume 169, Number 38 (Tuesday, February 28, 2023)]
[House]
[Pages H932-H940]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF THE RULE SUBMITTED BY THE 
  DEPARTMENT OF LABOR RELATING TO ``PRUDENCE AND LOYALTY IN SELECTING 
          PLAN INVESTMENTS AND EXERCISING SHAREHOLDER RIGHTS''

  Ms. FOXX. Mr. Speaker, pursuant to House Resolution 166, I call up 
joint resolution (H.J. Res. 30) providing for congressional disapproval 
under chapter 8 of title 5, United States Code, of the rule submitted 
by the Department of Labor relating to ``Prudence and Loyalty in 
Selecting Plan Investments and Exercising Shareholder Rights,'' and ask 
for its immediate consideration in the House.
  The Clerk read the title of the joint resolution.
  The SPEAKER pro tempore (Mr. Valadao). Pursuant to House Resolution 
166, the joint resolution is considered read.
  The text of the joint resolution is as follows:

                              H.J. Res. 30

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That Congress 
     disapproves the rule submitted by the Department of Labor 
     relating to ``Prudence and Loyalty in Selecting Plan 
     Investments and Exercising Shareholder Rights'' (87 Fed. Reg. 
     73822 (December 1, 2022)), and such rule shall have no force 
     or effect.

  The SPEAKER pro tempore. The joint resolution shall be debatable for 
1 hour, equally divided and controlled by the chair and ranking 
minority member of the Committee on Education and the Workforce or 
their respective designees.
  The gentlewoman from North Carolina (Ms. Foxx), and the gentleman 
from Virginia (Mr. Scott), each will control 30 minutes.
  The Chair recognizes the gentlewoman from North Carolina (Ms. Foxx).


                             General Leave

  Ms. FOXX. Mr. Speaker, I ask unanimous consent that all Members have 
5 legislative days to revise and extend their remarks and submit 
extraneous material on the resolution under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from North Carolina?
  There was no objection.
  Ms. FOXX. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.J. Res. 30, a Congressional 
Review Act resolution nullifying the Biden administration's attempt to 
politicize the retirement savings of Americans.
  ESG investing puts the future of millions of Americans in jeopardy. 
Due to Biden's reckless economic policies, too many Americans are 
worried about the rising costs of living. Diverting retirement savings 
to fund social justice causes will make this problem even worse. For 
current retirees, the situation is especially salient.
  Last year, the Biden Department of Labor published a rule allowing 
retirement plan fiduciaries to consider environmental, social, and 
governance, ESG, factors for making investment decisions and exercising 
shareholder rights.
  The rule removed commonsense protections for retirement savings 
established by the Trump administration, which ensured that retirement 
plan fiduciaries evaluate investments and exercise shareholder rights 
based only on the financial benefits to participants and beneficiaries. 
That is what retirement savers expect.
  Now, thanks to Democrats, workers can be placed into ESG investment 
vehicles by default. If a fiduciary finds that two investments are 
equal, the fiduciary is allowed to use collateral ESG factors to break 
the tie without justifying or documenting that decision.
  While my colleagues on the other side of the aisle have argued that 
the Biden rule is neutral, they have done a poor job of hiding the 
administration's true intentions.
  The Department issued the rule in response to two executive orders on 
climate change and the explanation of the rule is littered with 
Democrats' preferred political projects, such as labor relations, 
climate change, and workforce and corporate diversity.
  Further, DOL officials have repeatedly stated that they will pursue 
additional actions concerning ESG and retirement plans.
  The left is using ESG investment criteria as a political tool to 
cudgel companies into accepting leftist policies. This is how the left 
always operates. This is just the first step.

[[Page H933]]

  If we let this continue, the left will use ESG investing to push 
noncompliant companies out of the marketplace. This is pernicious and 
it is hypocritical.
  It is unacceptable to encourage fiduciaries to sacrifice the savings 
of Americans to the orthodoxy of the woke left. In fact, this is 
prohibited under the Employee Retirement Income Security Act of 1974, 
ERISA, as affirmed by the Supreme Court.
  Yet, the Biden administration's rule permitting and encouraging 
retirement plan fiduciaries to consider ESG when investing workers' 
savings flips ERISA on its head.
  By paving the way for ESG investing in employer-sponsored retirement 
plans, President Biden is threatening the retirement savings of 
Americans. Such a fundamental change to ERISA should be debated and 
considered in Congress, not enacted through executive fiat illegally. 
Americans invest to secure their future, not to fund the Green New Deal 
or leftist pet projects.
  Fiduciaries governed by ERISA should not be allowed to make 
investments they know will not pay off. A fiduciary's most important 
responsibility is to make investments that are in the financial 
interests of workers and retirees.
  It is time to stop this madness. That is why I support the resolution 
to nullify the Biden administration's destructive retirement plan rule.
  Mr. Speaker, I urge my colleagues to put workers and retirees above 
politics and vote for this resolution.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in opposition to H.J. Res. 30, a Congressional 
Review Act joint resolution of disapproval to nullify a popular and 
sensible rule issued by the Biden-Harris administration last year.
  Workers should be able to invest their retirement savings in a way 
that reflects their values, such as combating climate change, without 
sacrificing investment returns.
  That is why the Biden-Harris administration issued a rule to clarify 
that retirement plan fiduciaries may consider the economic effects of 
climate change and other environmental, social, and governance factors, 
or ESG factors, when they make investment decisions for participants in 
retirement plans.
  Now, to be clear, this rule is not an ESG mandate.
  Additionally, the rule does not change the fiduciary standard to 
which professionals who make investment decisions for retirement plans 
are bound. They must still prioritize the interests of retirement plan 
participants and cannot sacrifice investment returns to pursue ESG 
goals.
  Let's be clear. Consideration of ESG factors is not at odds with 
making a profit. In fact, workers' profit is still central, but if a 
company has negative externalities, such as carbon-intensive business 
practices, vulnerability to sea level rise, high liability risks, or a 
record of mistreating workers who may go on strike, its stock could 
suffer in the long term.

                              {time}  1415

  Workers often contribute to their retirement for decades before 
drawing down on their savings, so it makes sense that retirement plan 
beneficiaries must consider the long-term time horizon when making 
investment decisions.
  Finally, there is widespread support for the Biden-Harris 
administration's rule. Of the comment letters submitted on the proposed 
rule, 83 percent of the letters submitted by institutions like 
corporations, financial firms, and labor organizations supported the 
rule.
  Over 97 percent of the letters submitted by individuals supported the 
rule. Simply put, the Biden-Harris rule reflects the best interests of 
the American people and our economy.
  We should not get rid of this popular and reasonable rule by this 
resolution. The rule just simply allows retirement plan fiduciaries to 
appropriately consider ESG factors.
  Retirement fiduciaries, not House Republicans, are best positioned 
and bound by law to make prudent investment decisions on behalf of 
retirement savers.
  Mr. Speaker, I reserve the balance of my time.
  Ms. FOXX. Mr. Speaker, I yield 5 minutes to the gentleman from 
Kentucky (Mr. Barr), the originator of this CRA.
  Mr. BARR. Mr. Speaker, I thank the gentlewoman, the chairwoman of the 
committee, for her leadership in fighting the politicization of capital 
allocation and the politicization of retirement savings.
  Mr. Speaker, today House Republicans stand on the side of retail 
investors. We stand up for millions of Americans around the country who 
are increasingly asking themselves this simple question: When will I be 
able to retire?
  This Congressional Review Act measure that I am offering is a 
bipartisan, bicameral joint resolution, disapproving of a Department of 
Labor rulemaking that will politicize Americans' retirement accounts 
and jeopardize their retirement security.
  This measure simply states that retirement plan sponsors be required 
to prioritize maximum financial returns for investors ahead of 
nonpecuniary factors like environmental, social, and governance 
standards, a political agenda.
  We do so in a moment where one in five Americans have saved nothing 
for their retirement, including one in three baby boomers, the 
generation closest to retirement.
  We do so in a moment when 78 percent of Americans are either 
extremely or somewhat concerned about affording a comfortable 
retirement.
  We do so in a moment where the gap between the amount of money that 
Americans have saved for retirement and the amount that they will need 
for retirement is $3.8 trillion.
  That is why, Mr. Speaker, Congress must act to block the Biden 
administration's recent rule that green-lights so-called ESG investing 
in millions of Americans' retirement plans, plowing them into less 
diversified, higher fees, and lower-performing portfolios at precisely 
the time that we need to maximize financial security for Americans 
approaching retirement.
  So let's consider the facts. According to a recent Wall Street 
Journal report, ESG funds carry 43 percent higher fees than non-ESG 
funds.
  That is what they want. They want Americans to be forced into higher 
fee funds. A recent study from NYU and the University of Southern 
California found that over the past 5 years, global ESG funds have 
underperformed the broader market by 250 basis points per year, an 
average of 2.6 percent lower return than non-ESG funds.
  This stands to reason because ESG funds are, by design, less 
diversified. This is investing 101.
  When you discriminate against energy stocks, and you are heavy in 
tech, when you are in a tech sell-off, and when energy underperforms 
the market, who loses? The American retail investor who is unwittingly 
invested in these fraudulent, cancerous funds.
  This means that an investor who put $10,000 into an average global 
ESG fund in 2017 would have realized a $1,750 lower return than if they 
had invested in the broader market.
  While some of my friends on the other side of the aisle argue that 
ESG investing is actually driven by investors themselves, not 
ideologues at asset management firms and the White House who want to 
push their environmental or social causes at the expense of retail 
investors, a 2021 study conducted by the University of Chicago and 
FINRA proves investors largely do not care.
  Mr. Speaker, 21 percent of investors don't even know what ESG stands 
for. Is that popular? Is that what popular ESG is?
  And this neutrality nonsense. Look, nobody is saying you can't invest 
based on your values, but this bill would steer people unwittingly into 
these funds.
  The status quo does not deny people to invest based on their values. 
It just says that the default has to be to maximize returns.
  So, Mr. Speaker, this debate today is not about investor protection. 
It is about the ability of investors to maximize returns.
  It is also about energy security. Even if you don't have a retirement 
account, this radical ESG movement is hitting your wallet.
  Since President Biden took office, his administration has waged a war 
on

[[Page H934]]

American energy production; not just holding up leases or blocking 
infrastructure, but through financial regulation and the weaponization 
of financial regulation to divert resources and capital and financing 
away from the American energy sector.
  There has been a 25 percent decline in investment in natural gas and 
in oil investments since 2021, and the result? Gas prices are up 40 
percent, and diesel prices are almost double.
  Household energy costs hit a 10-year high this winter, costing 
average American families $1,200, according to a report from the 
National Energy Assistance Directors Association.
  These price hikes and the decline in investment in our energy supply 
come at the exact time that the Biden administration itself estimates 
that by 2050, almost half of our Nation's energy supply will be made up 
of oil and natural gas.
  Mr. Speaker, we need more, not less, capital investment and financing 
of American energy.
  I implore the administration. It is time for you to end your assault 
on energy production that is fueling 40-year high inflation.
  We, as Members of Congress, cannot allow this administration to 
continue to perpetrate their war on American energy at the expense of 
investors.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 2 minutes to the 
gentleman from Illinois (Mr. Casten), the co-chair of the Congressional 
Sustainable Investment Caucus.
  Mr. CASTEN. Mr. Speaker, 15 years ago, more than half of U.S. 
electricity came from coal. Today, it is less than 20 percent.
  We now generate more energy from renewables than from coal. This 
isn't anti-energy. It is about cheap energy.
  In 2022, last year, 10 percent of all vehicle sales in the United 
States were EVs. That was up from 6 percent the year before, 2 percent 
the year before that.
  ExxonMobil and Chevron today are trading at about 8 to 9 times their 
earnings. I would compare that to companies like First Solar and Tesla 
that are trading to 40 to 60 times earnings.
  Let me dumb this down for you all. Mr. Speaker, 10 years ago, if you 
shifted your investment portfolio away from fossil energy toward 
climate-friendly investments, you would be richer today.
  Now, my Republican colleagues, you all talk a good game about how you 
are into personal freedom, and yet you are taking individual investors' 
freedom away from them with this bill.
  You all talk a good game about how government should not be picking 
winners and losers. Why do you all keep picking losers?
  In 2011, a guy named Hugo Chavez redirected Venezuelan oil worker 
pensions into a Ponzi scheme run by a political ally.
  My Republican colleagues a couple weeks ago voted to oppose socialism 
in all its form. I am thinking that Hugo Chavez guy seems pretty smart. 
Let's do the same thing.
  You know what you call capitalism when you are losing? Woke 
capitalism.
  So if you all are afraid of free markets, if you want to destroy 
workers' pensions, if you oppose individual freedom, if you want to 
force your constituents to invest in proven losers, then please vote 
for this resolution. Be honest about your values.
  For everyone else, vote ``no.'' I plan to do so proudly and honestly.
  The SPEAKER pro tempore. Members are reminded to direct their remarks 
to the Chair.
  Ms. FOXX. Mr. Speaker, I yield 1 minute to the gentleman from Georgia 
(Mr. Allen).
  Mr. ALLEN. Mr. Speaker, over the past 2 years, one thing has become 
clear: This administration cares more about advancing its radical Green 
New Deal agenda than about the financial well-being of the American 
people.
  We have seen it with their energy policy, but the latest example is 
the Biden administration's rule to inject woke ESG factors into 
workers' retirement accounts.
  Thanks to President Biden's economic policies, workers' retirement 
savings were down 10 percent in 2022 compared to 2021. Why is this 
administration doubling down to further jeopardize Americans' 
retirement?
  Retirement plan sponsors have two responsibilities to their clients: 
maximize returns and minimize risk. The Biden rule would allow asset 
managers to impose a political agenda on Americans at the expense of 
retirement savings.
  The Biden administration should not be jeopardizing Americans' 
retirement by allowing plan managers to gamble their savings on ESG 
funds that have proven to be riskier and charge steeper fees.
  That is why I cosponsored this bill with my friend,   Andy Barr, to 
use our authority to nullify the Biden rule and protect Americans' 
hard-earned retirement savings from politically motivated 
mismanagement.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 2 minutes to the 
gentleman from California (Mr. DeSaulnier), the distinguished ranking 
member of the Subcommittee on Health, Employment, Labor, and Pensions.
  Mr. DeSAULNIER. Mr. Speaker, I thank the gentleman for yielding.
  The Department of Labor's environmental, social, and governance rule 
is good for retirees, and it is good for the American economy.
  Allowing ESG considerations can help financial professionals identify 
investments that will be sustainable in the long term and in the best 
interest of their clients.
  The rule is not an ESG mandate. It simply clarifies that the 
professionals who make investment decisions for retirement plans do not 
violate their fiduciary duties by merely considering ESG factors.
  Existing law already says that these professionals' primary purpose 
is to make the best financial choices for the plans, and this rule does 
not change that at all.
  It merely is a recognition that if a company is inherently risky 
because of the business they do or their internal practices, its stock 
could suffer in the long run.
  Just like American consumers can be motivated to disinvest from 
companies that pollute or mistreat their workers, now investors will 
have the same abilities.
  As the ranking member of the Subcommittee on Health, Employment, 
Labor, and Pensions, I have seen overwhelming support for this rule, 
especially from the financial industry.
  Rolling it back would be a significant step backward. I strongly 
oppose H.J. Res. 30 and encourage all Members to do the same so they 
can leave retirement plan decisions to the retirees and the 
professionals they respect and they work with.

  Ms. FOXX. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from Virginia (Mr. Good).
  Mr. GOOD of Virginia. Mr. Speaker, today the House can repeal a 
policy from the Department of Labor that harms Americans who simply 
want to save for retirement.
  This new rule from the Biden administration says that investment 
decisions in employer-sponsored retirement plans can be based on 
climate change and other environmental, social, or governance factors.
  So typically without the knowledge of the retirees, their investment 
funds can be invested in underperforming investments that subsidize 
unreliable and unaffordable energy.
  Congress never originally intended for 401Ks to be used to advance 
the priorities of the phony climate movement or to push a social 
justice agenda.
  They were simply intended to help people to have the resources they 
need in retirement. If ESG-based stocks are higher performing, they 
would get those investment dollars anyway without this new rule.
  But Americans inherently know that investing should be about 
evaluating risk and return from a financial point of view.
  Hardworking Americans want to know their investments have strong 
economic fundamentals that will help them build wealth over a lifetime 
of work.
  If Congress is successful in overturning this rule, the investing 
standard will return to one based on financial factors only.
  It is bad enough that Bidenflation has eroded the spending power of 
many retirement savings accounts. Matter of fact, the average 
retirement account is down 30 percent over the last 2 years.
  Many retirees are having to change their retirement plans or to 
downsize or to work longer. There is even an increase in the number of 
Americans who

[[Page H935]]

are borrowing or withdrawing from the retirement accounts before 
retirement, just trying to make ends meet.

                              {time}  1430

  Still, the Department of Labor used executive fiat to leverage 
trillions of dollars that would be vested in retirement plans to 
advance their woke agenda that can't pass Congress.
  With this vote, Congress can put some checks and balances to work for 
the American people, and I urge my colleagues in the House and the 
Senate to protect the retirement plans of hardworking Americans by 
voting for this bill.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 2 minutes to the 
gentlewoman from Minnesota (Ms. Omar), a distinguished member of the 
Committee on Education and the Workforce.
  Ms. OMAR. Mr. Speaker, I rise today in strong opposition to H.J. Res. 
30.
  When we, as Americans, are given the opportunity to know what 
investments to make, the kind of investments that we can make, and the 
kind of impacts that they will have, that matters. That choice should 
always be with each one of us. The investments that we make might have 
an impact on the rest of the world.
  Many of us would be outraged if we knew that our investments went 
toward forced labor activities in China and other parts of the world. 
Yet, this resolution would make it difficult for hardworking Americans 
to determine what investments are being made in their name.
  Our constituents deserve the freedom to access this information and 
to have the right to ensure that their money is being invested in a way 
that is aligned with their values.
  Mr. Speaker, I urge my colleagues to reject this resolution and 
protect the rights of Americans to make financial and moral decisions 
about the kind of investments that they want their retirement to be 
made of.
  Ms. FOXX. Mr. Speaker, I yield 3 minutes to the gentleman from 
Wisconsin (Mr. Grothman).
  Mr. GROTHMAN. Mr. Speaker, I am glad this House joint resolution is 
before us today. We continue to march toward a different sort of 
government, and part of that different sort of government is the ESG 
ideology being imposed or encouraged on America's corporations.
  This is an ideological push on corporations, of which there is too 
much already. Already, particularly big corporations have seminars 
giving the leftwing view of the environment, the leftwing view of race, 
the leftwing view of agenda.
  This is to further push down on them and say: Here you are, Mr. Big 
Corporation. We will give you a nice pat on the back if you use all of 
your stockholders' money to promote a political agenda.
  Obviously, that should be offensive to any freedom-loving person in 
America.
  Of course, in addition to that, studies from UCLA and New York 
University show that the average corporation that engages in this ESG 
stuff, their market goes up 6.3 percent instead of 8.9 percent, so the 
shareholders have to pay a price.
  To me, secondarily to the shareholders paying a price is this pound, 
pound, pound that we already get from the universities, that we already 
get from the popular culture and Hollywood, and now we have to get it 
from big business, that the traditional, freedom-loving moral values of 
America are something to be stepped aside, and we, big corporate 
America, are going to ingratiate ourselves to the leftwing bureaucrats 
in Washington by following the ESG standards.
  I am very grateful that my good friend from North Carolina has let me 
give this speech, and I sincerely hope everybody stands up for freedom.
  The other side of the aisle would not like it if the people who 
decide what ESG was, was written by   Jim Jordan, okay? Maybe someday 
that will happen. I don't know.
  I liked it better when the big corporations stayed out of this thing, 
but you want to put the sword over their throat and say: This is the 
view of the world that you must adopt. You must have seminars and shove 
it down the throats of your employees.
  It will be a bad day for America if this thing doesn't pass.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 2 minutes to the 
gentleman from California (Mr. Vargas), a co-chair of the Congressional 
Sustainable Investment Caucus.
  Mr. VARGAS. Mr. Speaker, many times, things around here get topsy-
turvy. We have a group here involved in an anticapitalist crusade 
against free-market principles, attempting to prevent financial 
institutions from allocating capital in accordance with investors' 
preferences and risk management priorities.
  Under their proposed resolution, investment advisers can no longer 
consider environmental, social, and governance factors that materially 
impact a company's performance and bottom line. That means that your 
hard-earned dollars cannot be adequately invested because you, the 
American worker, are now exposed to greater risk.
  It is interesting it doesn't say that you must invest in ESG. All 
that the Biden administration says is that you can if you want to.
  Whatever happened to capitalistic ideals that you should be able to 
invest in what you want? You are trying to force people to say: No, you 
cannot invest looking at a strategy of ESG.
  That doesn't make any sense at all. It doesn't make any sense at all. 
It is anticapitalistic. It is antimarket. We should not support this 
resolution.
  Ms. FOXX. Mr. Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Bean).
  Mr. BEAN of Florida. Mr. Speaker, he is at it again. President 
Biden's war on America's energy continues.
  It started on day one with the cancellation of the Keystone XL 
pipeline, and 2 years later, this administration is pushing 
environmental, social, and governance, or ESG, to clog America's oil 
and gas production.
  The Department of Labor is seeking to weaponize American retirement 
funds as part of President Biden's anti-fossil fuel agenda, all at the 
expense of your retirement savings. ESG requirements not only 
exacerbate high energy costs but also contribute to inflationary woes 
and weaken our national security.

  To be clear, ESG is more government control. ESG is less freedom for 
Americans. ESG simply is a woke capitalist scam posing as responsible 
corporate governance, which robs Americans of their hard-earned 
retirement investments.
  It is time to stand against the progressive mob, which only wants an 
inch but seems to take a mile. Today, we are going to say no. We are 
going to draw the line and say it ends now.
  It is time to stand against the progressive mob and safeguard our 
Nation's energy independence from the outstretched claws of ESG. A 
correct vote on the bill today is ``yes,'' as a ``yes'' vote today says 
no to ESG.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield 2 minutes to the 
gentleman from Rhode Island (Mr. Magaziner).
  Mr. MAGAZINER. Mr. Speaker, I rise to oppose this misguided 
resolution, which will tie the hands of investors from doing their jobs 
and will hurt the retirement savings of millions of hardworking 
Americans.
  The evidence is clear. Companies that adopt thoughtful policies to 
manage their environmental, social, and governance risks outperform 
those that don't. I will say that again. Companies that have thoughtful 
policies to manage their environmental, social, and governance risks 
outperform those that don't.
  Don't believe me? Ask the shareholders of BP, whose stock fell more 
than 50 percent after the Gulf oilspill, wiping out billions of dollars 
of shareholder value; or Volkswagen, whose stock fell 45 percent after 
they were caught cheating on emissions tests.
  How about Norfolk Southern? They are in the news lately. Their stock 
is tanking because of their inattention to managing the safety of their 
operations.
  The fact is that environmental, social, and governance issues are 
financially material to company performance. Any investor who knows 
what they are doing would be foolish to ignore those factors.
  I know this because, as State treasurer and as an investor in the 
private sector, I have spent the last 10 years studying corporate 
performance. ESG issues matter.
  Even if you don't agree with me, even if you think that environmental 
and social issues are not material to performance, you ought to at 
least believe

[[Page H936]]

that, in a free market, investors should have the power to make their 
own decisions and to choose which factors they think are material or 
not.
  Let them use their professional judgment. Don't try to police what 
investors are thinking when they are making decisions.
  Why is it that the Republican majority, which claims to be the party 
of limited government and free markets, is abandoning its free-market 
principles and trying to dictate to investors what they have to think? 
It makes no sense.
  If anyone was wondering what this is about, it is not about free 
markets. It is not, certainly, about protecting workers' retirement 
security.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield an additional 1 minute to 
the gentleman from Rhode Island.
  Mr. MAGAZINER. I will just say again, let's be honest about what this 
debate is really about. It is not about protecting worker retirement 
savings. If we were serious about that, we would be saying that ESG is 
material and should be considered.
  It is not about free-market principles.
  Could it be that it has to do with the oil and gas industry pouring 
tens of millions of dollars into campaign accounts on the Republican 
side? Could that be what is driving this?
  Well, I think we see now where the priorities of our colleagues on 
the Republican side lie--not with workers, not with free-market 
principles, but with doing the bidding of the oil and gas industry.
  Ms. FOXX. Mr. Speaker, I yield 2 minutes to the gentleman from 
Kentucky (Mr. Barr).
  Mr. BARR. Mr. Speaker, I don't know if my colleagues on the other 
side of the aisle don't understand the existing law and what this 
resolution does and what the Department of Labor's new rule is, or 
whether they are just trying to confuse the listeners and watchers here 
today because the truth is that this is not material for the vast 
majority of Americans.
  The studies show that most Americans don't even know what ESG is. To 
the extent Americans do find it material, nothing in this resolution 
prohibits an American from allocating their capital the way they want 
to.
  What this resolution will do is stop the Department of Labor from 
coercing Americans into lower performing, higher fee, less diversified, 
politicized funds. We must stop the politicization of allocation of 
capital.
  When my friend from Illinois says: Well, why are Republicans picking 
losers? Really?
  In 2022, the S&P 500 energy sector ended the year a whopping 59 
percent higher than where it started. Amid a brutal bear market in 
which the S&P 500 overall lost 20 percent, if you were invested in ESG 
in 2022, you were a massive loser because you were divested from 
energy.
  Stop the politicization of capital. If you want to give Americans 
freedom to choose what is material for them in investing, vote against 
the Department of Labor rule, which would conceal what the Department 
of Labor is doing, which is steering Americans into investments that 
have political values that they disagree with.
  Give Americans true transparency. Go back to the Department of Labor 
rule under the Trump administration, which says the default should 
always be consistent with ERISA, maximizing financial performance.
  If you want an alternative, if you want to subordinate financial 
returns to the environment, to climate change, to social justice, to 
whatever, and you really don't care about your retirement security, 
then you can choose that.
  Let the American investor decide, and the default should always be 
maximum investor returns.
  Mr. SCOTT of Virginia. Mr. Speaker, I am prepared to close, and I 
reserve the balance of my time.
  Ms. FOXX. Mr. Speaker, I yield myself such time as I may consume.
  It is a little ironic that our side of the aisle is being accused of 
being anticapitalist and anti-free market. I would like to clarify for 
the record the content of the Trump Department of Labor rule on 
retirement plan ESG investing.
  Under the Trump rule, if a fiduciary finds that an ESG factor is a 
pecuniary or financial factor, it can be considered when investing and 
exercising shareholder rights.

                              {time}  1445

  Here are a few excerpts of the Trump rule, to set the record 
straight:
  ``Nothing in the final rule is intended to or does prevent a 
fiduciary from appropriately considering any material risk with respect 
to an investment.''
  Another quote: ``The ERISA fiduciary duty of prudence requires 
portfolio-level attention to risk and return objectives reasonably 
suited to the purpose of the account, diversification, cost 
sensitivity, documentation, and ongoing monitoring.''
  ``The proposal was not intended to suggest that these principles 
apply other than neutrally to all investment decisions. . . . ''
  To suggest that the Trump rule barred a fiduciary from appropriately 
considering any factor that may be material to an investment is 
blatantly false. If anything, the Trump rule was neutral as to the 
prudent decisions of fiduciaries.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself the balance of my 
time for closing.
  Mr. Speaker, during this debate, we have heard a lot about ESG 
investing. It is clear there is a difference of opinion on it, but 
whether Members of Congress see things the same way is not the point.
  What matters is that the Biden-Harris rule puts the decisionmaking 
when it comes to considering ESG factors where it belongs, in the hands 
of retirement plan fiduciaries who are best positioned and bound by 
law, which has not changed, to act prudently on behalf of plan 
participants. That is where the decisionmaking should stay.
  They, not Members of Congress, know what is in the best interests of 
their plan participants, and they are bound by their fiduciary 
responsibilities to do the right thing.
  Now, when supporters say that a fiduciary should not consider 
nonpecuniary factors, they ignore the fact that ESG factors can, in 
fact, be pecuniary, because often ESG factors, such as sea level rise, 
can have a profound effect on the value of the investment. Those who 
recognize this should be able to make reasonable investments based on 
that knowledge.
  Mr. Speaker, I include in the Record several letters from 
organizations opposed to H.J. Res. 30. Eighty-three percent of 
institutions that submitted comments were in favor of the underlying 
rule. These organizations, who are opposed to H.J. Res. 30, include the 
AFL-CIO, Americans for Financial Reform, Public Citizen, SEIU, 
Environmental Defense Fund, League of Conservation Voters, Sierra Club, 
Natural Resources Defense Council, Union of Concerned Scientists, and 
others.

                                                          AFL-CIO,


                                            Legislative Alert,

                                                February 16, 2023.
       Dear Representative: On behalf of the AFL-CIO, we urge you 
     to oppose the Congressional Review Act joint resolution that 
     has been introduced by Sen. Mike Braun and Rep. Andy Barr to 
     disapprove of the Department of Labor's recently adopted rule 
     ``Prudence and Loyalty in Selecting Plan Investments and 
     Exercising Shareholder Rights'' (SJ. Res. 8, HJ. Res. 30).
       The Department of Labor's rule clarifies that private 
     sector retirement plan fiduciaries may consider 
     environmental, social and governance (``ESG'') factors when 
     making plan investments or voting proxies. The rule does not 
     require that retirement plan fiduciaries consider ESG 
     factors, it simply acknowledges the fact that ESG factors may 
     be relevant to investment returns.
       Indeed, the consideration of ESG factors helps protect the 
     hard-earned retirement savings of working people. ESG risks 
     are particularly relevant for long-term investors, such as 
     retirement plans, who are investing over the expected 
     lifespans of their participants and beneficiaries. For this 
     reason, ignoring ESG risks to an investment portfolio may be 
     financially imprudent.
       Contrary to what some would have you believe, investment 
     professionals' consideration of ESG factors is not limited to 
     environmental risks, such as climate change. Social issues 
     such as respect for workers' rights and governance issues 
     such as having responsible executive compensation can also 
     impact sustainable investment returns.
       The rule affirms that proxy votes should be cast in the 
     best interests of plan participants and beneficiaries, 
     thereby giving workers' retirement savings a voice in 
     corporate decision making. The rule also ensures that the 
     default investment for defined contribution

[[Page H937]]

     plans is the best option available regardless of whether the 
     investment considers ESG factors.
       Finally, the rule clarifies when retirement plan 
     fiduciaries may consider benefits other than investment 
     returns. These benefits can include the creation of good 
     jobs, affordable housing, and economic growth for local 
     communities. Such benefits may only be considered as 
     tiebreakers between competing investments that equally serve 
     the financial interests of the plan.
       This rule makes clear that any consideration of ESG factors 
     must be consistent with the fiduciary duties of loyalty and 
     care. Retirement plan fiduciaries cannot sacrifice risk-
     adjusted investment returns under any circumstances. The rule 
     appropriately holds the consideration of ESG factors to the 
     exact same documentation requirements as any other fiduciary 
     decision.
       The decision of whether to consider ESG factors should be 
     left to investment professionals, not politicians. Trillions 
     of dollars in assets under management already take ESG 
     factors into consideration when making investment decisions. 
     Congress should not interfere in the free market by seeking 
     to prohibit the consideration of ESG factors.
       For these reasons, we strongly urge you to oppose 
     disapproval of the Department of Labor's rule ``Prudence and 
     Loyalty in Selecting Plan Investments and Exercising 
     Shareholder Rights.'' Congress should not play politics with 
     our pension plans by repealing this commonsense rule.
           Sincerely,
                                                   William Samuel,
     Director, Government Affairs.
                                  ____



                               Americans for Financial Reform,

                                                February 24, 2023.
     Hon. Chuck Schumer,
     Senate Majority Leader,
     U.S. Senate, Washington, DC.
     Hon. Kevin McCarthy,
     Speaker of the House,
     House of Representatives, Washington, DC.
     Chairman Bernie Sanders,
     HELP Committee,
     U.S. Senate, Washington, DC.
     Chairwoman Virginia Foxx,
     Education and the Workforce Committee,
     House of Representatives, Washington, DC.
     Hon. Mitch McConnell,
     Senate Minority Leader,
     U.S. Senate, Washington, DC.
     Hon. Hakeem Jeffries,
     House Minority Leader,
     House of Representatives, Washington, DC.
     Ranking Member Bill Cassidy,
     HELP Committee,
     U.S. Senate, Washington, DC.
     Ranking Member Bobby Scott,
     Education and Workforce Committee,
     House of Representatives, Washington, DC.
       Dear Senate Majority Leader Schumer, Senate Minority Leader 
     McConnell, House Speaker McCarthy, House Minority Leader 
     Jeffries, HELP Committee Chairman Sanders, HELP Ranking 
     Member Cassidy, House Education and the Workforce Committee 
     Chairwoman Foxx, and House Education and the Workforce 
     Committee Ranking Member Scott: The undersigned organizations 
     urge you to defend the Department of Labor's important 
     fiduciary rule that safeguards the savings of millions of 
     workers who participate in private-sector employee benefit 
     plans. The rule, titled ``Prudence and Loyalty in Selecting 
     Plan Investments and Exercising Shareholder Rights,'' has 
     four main components: 1) removes costly and impractical 
     record-keeping burdens on fiduciaries to ensure those who 
     manage workers' money have the flexibility needed to consider 
     all financially relevant risks and opportunities; 2) allows 
     consideration of collateral benefits such as creating union 
     jobs only if different investment options equally serve the 
     financial interests of the plan over the appropriate time 
     horizon; 3) increases workers' investment choices within the 
     confines of ERISA's stringent protections; and 4) removes 
     costly and unnecessary barriers to the exercise of 
     shareholder rights.
       A vote in favor of a Congressional Review Act (CRA) 
     resolution to nullify the rule is an affirmative vote for 
     unworkable, burdensome Trump-era rules. Trump-era rules 
     erected ``needless barriers'' and had a ``chilling effect . . 
     . on considering environmental, social and governance factors 
     in investments'' that are financially relevant. The Trump 
     rules also put the thumb on the scale against workers' 
     ability to exercise their shareholder rights, diluting 
     workers' shareholder voice. Additionally, three lawyers, all 
     experts in ERISA, recently published a paper that included an 
     in-depth analysis of why the distinction between 
     ``pecuniary'' and ``non-pecuniary,'' first introduced in the 
     Trump-era rules and ``roundly criticized during the 
     rulemaking comment process,'' is self-contradictory and 
     unworkable.
       The Biden DOL rule repeatedly affirms the core ERISA tenet: 
     that fiduciaries are not allowed to sacrifice returns in the 
     pursuit of collateral benefits. The Biden rule returns power 
     to fiduciaries to make the best decisions regarding relevant 
     risks and returns in their participants' best interests, in 
     contrast to the Trump-era rules, which sought to inject 
     politics into fiduciary decision-making.
       The CRA resolution is part of a larger, failing effort to 
     imbue ``ESG'' with false meaning, vilify it, and legislate 
     against it. This effort is backed by powerful corporate 
     interests--including fossil fuel companies looking to 
     postpone the inevitable decarbonization of the economy--that 
     are attempting to roll back progress that has been made on 
     climate change, workers' rights, racial equity, and other ESG 
     issues with clear financial implications. They are doing so 
     by pushing legislation and other policies that hurt both 
     workers' hard-fought pensions and taxpayers.
       This effort is unpopular--with 63 percent of voters 
     agreeing the government should not set limits on corporate 
     ESG investments, including 70 percent of Republicans and 57 
     percent of Democrats--and has suffered numerous, recent 
     failures including: 1) Indiana's budget office finding that a 
     bill forcing pension funds to divest from asset managers that 
     consider ESG factors would cost $6.7 billion over the next 
     decade in sub-market returns, force retirees to increase 
     their contributions, and impose an additional $550,000 
     administrative costs a year; 2) Arizona Attorney General Kris 
     Mayes announcing Arizona will no longer participate in 
     investigations into banks and other financial institutions 
     over ESG investing practices, stating that she believes ``it 
     is not the place of government to tell corporations and their 
     investors that they cannot invest in sustainable technologies 
     and practices or improve their governance processes; 3) a 
     study finding that a 2021 Texas investment blacklist would 
     cost municipalities an additional $303 million to $532 
     million in bond interest; and 4) North Dakota voting down, 
     90-3, a Texas-style bill that would have required the state 
     treasurer to prepare a blacklist of financial firms that have 
     committed to reducing carbon emissions.
       For all the reasons stated above, we urge you to protect 
     workers' pensions from anti-ESG attacks and vote no on the 
     CRA resolution. For further discussion, please contact 
     Natalia Renta.
           Sincerely,
       Americans for Financial Reform; Public Citizen; 
     1worker1vote; 350Hawaii; 7 Directions of Service; Abacus 
     Wealth Partners; Adrian Dominican Sisters, Portfolio Advisory 
     Board; American Family Voices; American Sustainable Business 
     Network; As You Sow; B Lab U.S. & Canada; California 
     Reinvestment Coalition; Change Finance; Change the Chamber; 
     Climate Finance Action; Climate Hawks Vote.
       Community Development Venture Capital Alliance; 
     Congregation of St. Joseph; Connecticut Citizen Action Group 
     (CCAG); Consumer Federation of America; Daughters of Charity, 
     Province of St. Louise; Demand Progress; Divest Oregon; Earth 
     Action, Inc.; Earthjustice; Florida for Good; Fresh Water 
     Accountability Project; Future Nexus; Green America; 
     Harrington Investments, Inc.; Honor the Earth; Intentional 
     Endowments Network.
       Interfaith Center on Corporate Responsibility (ICCR); 
     Kingdom Living Temple Church; League of Conservation Voters; 
     Mercy Investment Services, Inc.; Montana Environmental 
     Information Center; National Community Investment Fund; 
     National Employment Law Project; Natural Investments LLC; New 
     Alpha Community Development Corporation; NYU Stem Center for 
     Business and Human Rights; Oil & Gas Action Network; Omidyar 
     Network; Opportunity Finance Network; Oxfam America; Pensions 
     & Investment Research Consultants, Ltd.; Physicians for 
     Social Responsibility--Pennsylvania.
       Predistribution Initiative; Rabbis and Cantors Retirement 
     Plan; Revolving Door Project; Rights CoLab; Sciencecorps; 
     Seventh Generation Interfaith Coalition for Responsible 
     Investment; Sierra Club; Shareholder Rights Group; SOC 
     Investment Group; Socially Responsible Investment Coalition; 
     The B Team; Toniic Institute; Trillium Asset Management; 
     Union of Concerned Scientists; U.S. Impact Investing 
     Alliance; Whitney M. Slater Foundation; Zero Hour.
                                  ____



                                                         SEIU,

                                Washington, DC, February 21, 2023.
       Dear Senator: On behalf of the two million members of the 
     Service Employees International Union (SEIU), I write to 
     oppose S.J. Res. 8 and H.J. Res. 30, the Congressional Review 
     Act joint resolution(s) that have been introduced by Senator 
     Mike Braun and Rep. Andy Barr to disapprove of the Department 
     of Labor's recently adopted rule entitled ``Prudence and 
     Loyalty in Selecting Plan Investments and Exercising 
     Shareholder Rights.'' The rule clarifies that private sector 
     retirement plan fiduciaries may consider environmental, 
     social and governance (``ESG'') factors when making plan 
     investments or voting proxies. The rule does not require that 
     retirement plan fiduciaries consider ESG factors, it simply 
     acknowledges the fact that ESG factors may be relevant to 
     investment returns. Further retirement plan fiduciaries 
     cannot sacrifice risk-adjusted investment returns under any 
     circumstances. The rule appropriately holds the consideration 
     of ESG factors to the exact same documentation requirements 
     as any other fiduciary decision.
       The consideration of ESG factors helps protect the hard-
     earned retirement savings of working people. ESG risks are 
     particularly relevant for long-term investors, such as 
     retirement plans, who are investing over the expected 
     lifespans of their participants and beneficiaries. Ignoring 
     ESG risks, or pretending that they don't exist, may be 
     financially imprudent to an investment portfolio and could 
     end up with long term consequences. Contrary to outlandish 
     claims by those who oppose the rule, investment 
     professionals' consideration of ESG factors that could impact 
     sustainable investment returns is not limited to 
     environmental risks, such

[[Page H938]]

     as climate change, but could also include other societal 
     issues such as respect for workers' rights, or even 
     governance issues such as having responsible executive 
     compensation.
       The rule also affirms that proxy votes should be cast in 
     the best interests of plan participants and beneficiaries, 
     therefore giving workers' retirement savings a voice in 
     corporate decision making. The rule also ensures that the 
     default investment for defined contribution plans is the best 
     option available regardless of whether the investment 
     considers ESG factors. Finally, the rule clarifies when 
     retirement plan fiduciaries may consider benefits other than 
     investment returns. These benefits can include the creation 
     of good jobs, affordable housing, and economic growth for 
     local communities. These benefits may only be considered as 
     tiebreakers between competing investments that equally serve 
     the financial interests of the plan.
       The rule makes clear that any consideration of ESG factors 
     must be consistent with the fiduciary duties of loyalty and 
     care. The decision of whether to consider ESG factors should 
     be left to investment professionals, and Congress should not 
     interfere by prohibiting the consideration of ESG factors. 
     For these reasons, we urge you to oppose and vote against 
     S.J. Res. 8 and H.J. Res. 30. We will add any votes on this 
     legislation to our legislative scorecard for the 118th 
     Congress.
           Sincerely,
                                                        John Gray,
     Legislative Director.
                                  ____



                                     House of Representatives,

                                Washington, DC, February 27, 2023.
       Dear Representatives: Americans work hard for their 
     retirement savings and need to be able to trust that their 
     401(k) and pension plans can be managed to prudently account 
     for all financial risks. That is why the Department of Labor 
     (DOL) issued a rule in November 2022 to ensure that 
     retirement plan managers can consider all factors relevant to 
     investment risk and return in their decision-making, 
     including financial risks due to climate change. H.J. Res. 
     30, the Congressional Review Act (CRA) resolution to block 
     the DOL rule, is a threat to Americans' retirement savings. 
     Our organizations urge all Representatives to oppose H.J. 
     Res. 30.
       Congress passed the Employee Retirement Income Security Act 
     of 1974 (ERISA) to protect the hard earned retirement savings 
     upon which workers and their families rely. For decades, 
     DOL's ERISA rules set forth retirement plan managers' core 
     duty to prudently consider all relevant factors, while 
     remaining neutral on investment types. In 2020, the Trump 
     Administration deviated from this longstanding approach by 
     issuing ERISA rules that discouraged consideration of 
     environmental, social, and governance (ESG) factors--even 
     when these factors affect investment risk and return.
       The 2022 DOL rule under ERISA returns to neutrality, in 
     which plan managers can consider all relevant factors to 
     assess investment risk. The rule does not mandate, prohibit, 
     encourage, or discourage any particular type of investment. 
     The rule is clear that retirement plan managers must base 
     their decisions on financial risk-return factors. Those 
     financial factors may include the financial risks and 
     economic impacts of changing climate and other environmental, 
     social and governance factors.
       The DOL rule is supported by diverse groups including the 
     AFL-CIO, investment managers like Vanguard and TIAA, and the 
     American Retirement Association. President Bush's Assistant 
     Secretary of Labor, Bradford Campbell stated that ``the new 
     rule is more consistent with the regulatory history than the 
     2020 rule was.'' Public comments submitted demonstrate 
     overwhelming and broad support for the Department of Labor 
     rule.
       The DOL rule restores plan managers' freedom to consider 
     all financially relevant factors, including financial risks 
     due to climate change, so they can offer prudent investment 
     choices to workers. American workers deserve no less.
       Congress: protect Americans' retirement savings by voting 
     NO on this CRA resolution H.J. Res. 30.
           Sincerely,
       Environmental Defense Fund, League of Conservation Voters, 
     Americans for Financial Reform, California Reinvestment 
     Coalition, Center for American Progress, Ceres Accelerator 
     for Sustainable Capital Markets, Change the Chamber, Clean 
     Water Action, Climate Action Campaign, Climate Hawks Vote, 
     Earthjustice, Evergreen Action, Natural Resources Defense 
     Council, Public Citizen, Sierra Club, Union of Concerned 
     Scientists, WWF.

  Mr. SCOTT of Virginia. Mr. Speaker, these organizations have diverse 
missions, but they all agree that H.J. Res. 30 should be rejected.
  Mr. Speaker, I include in the Record two letters from financial 
services firms who submitted supportive comments on the underlying 
rule. These firms are BNY Melon Investment Management and Lazard Asset 
Management, who have trillions of dollars in assets under management.


                                                   BNY Mellon,

                                                December 13, 2021.
     Office of Regulations and Interpretations,
     Employee Benefits Security Administration,
     U.S. Department of Labor, Washington, DC.
       On behalf of BNY Mellon Investment Management, thank you 
     for the opportunity to submit comments on the notice of 
     proposed rulemaking entitled ``Prudence and Loyalty in 
     Selecting Plan Investments and Exercising Shareholder 
     Rights'' (the ``Proposal'') published by the U.S. Department 
     of Labor (the ``Department''). We strongly support the 
     Department's efforts to clarify the regulatory treatment of 
     environmental, social, and governance (``ESG'') factors under 
     Title I of the Employee Retirement Income Security Act of 
     1974, as amended (``ERISA'') following the publication of 
     ``Financial Factors in Selecting Plan Investments'' and 
     ``Fiduciary Duties Regarding Proxy Voting and Shareholder 
     Rights'' (together, the ``Current Rules''). To continue the 
     Department's efforts to add clarity to the use of ESG factors 
     by fiduciaries we suggest the Department add clarification in 
     the rule or preamble that a fiduciary can use a screen to 
     consider ESG factors based on the fiduciary's determination 
     that a particular ESG factor will impact investment value 
     consistent with Section 2550.404a-1(c)(2) of the Proposal.
       BNY Mellon Investment Management is a division of BNY 
     Mellon, one of the world's largest financial services groups. 
     With a presence in 35 countries, BNY Mellon looks to connect 
     investors with opportunities across every major asset class. 
     BNY Mellon Investment Management encompasses BNY Mellon's 
     affiliated investment firms and global distribution 
     companies, constituting over $2.3 trillion in AUM (as of 
     September 30, 2021).
       BNY Mellon Investment Management follows a multi-boutique 
     investment management model that weds the specialist 
     expertise from its investment firms offering solutions across 
     every major asset class, backed by the strength, stewardship, 
     and global presence of BNY Mellon. Each investment firm has 
     its own unique culture, investment philosophy, and 
     proprietary investment processes, and provides a global 
     perspective. Our seven majority owned investment firms, are 
     as follows (all AUM figures as of September 30, 2021): 
     Alcentra ($41.0B), ARX ($7.0B), Dreyfus Cash Investment 
     Strategies ($342.7B), Insight Investment ($1,100.0B), Mellon 
     ($448.6B), Newton Investment Management ($139.1B), and Walter 
     Scott ($99.9B).
       At BNY Mellon Investment Management our Responsible 
     Investment (RI) approach varies across our investment firms, 
     but the effective stewardship of our clients' assets is 
     common to all and core to our own purpose. Many products or 
     solutions offered by BNY Mellon Investment Management examine 
     ESG factors in their investment processes and decision-making 
     to better manage risk and generate sustainable long-term 
     returns. Six of our investment firms--Alcentra, ARX, Insight, 
     Mellon, Newton, and Walter Scott--are signatories of the 
     Principles for Responsible Investment (``PRI'').
       As we have noted in a previous comment letter, over the 
     past decades, fiduciaries and investment managers have come 
     to appreciate the materiality that ESG factors can have on 
     investment value. We welcome the Department's clarifications 
     to the Current Rules regarding the use of ESG factors and the 
     exercise of shareholder rights. The acknowledgement by the 
     Department that climate risks and other ESG factors can be 
     and often are material to investment risk and returns will 
     better allow fiduciaries to mitigate risk and enhance returns 
     based on evaluating ESG factors.
       Within the last decade, a deep body of research has been 
     produced that demonstrates the material influence of ESG 
     factors on the profitability of an enterprise and the 
     performance of its securities. For example, weak control of 
     environmental activities such as pollution, over-consumption 
     of raw materials or lack of recycling of waste materials 
     readily leads to volatile or lower achieved margins or 
     financial penalties that reduce investor returns. Similarly 
     with social issues: high staff turnover, high strike rates or 
     absenteeism or death or injury rates have all been linked to 
     lower productivity and poor quality control. Regarding 
     governance, we know from years of empirical observation that 
     poorly managed issuers can seriously damage investor returns. 
     To ignore the entire category of information and analysis 
     that comprise ESG factors, therefore, could be deemed an 
     abrogation of a fiduciary's responsibility to consider all 
     material information when assessing the risk and return of 
     any investment opportunity.
       The Proposal appropriately balances the materiality that 
     ESG factors can have on investment value with the 
     Department's longstanding principles that a fiduciary's 
     duties of prudence and loyalty require the fiduciary to 
     consider factors that are material to investment value. In 
     particular, a fiduciary should not subordinate the interests 
     of plan participants and beneficiaries to other objectives, 
     nor sacrifice investment return or take on additional 
     investment risk to promote goals unrelated to the plan and 
     its participants and beneficiaries. We specifically believe 
     that the proposed removal of the definition of ``pecuniary 
     factors'' and the revision to the Current Rules providing 
     that a fiduciary's evaluation of an investment or investment 
     course of action should be based on factors that ``are 
     material to investment value'' both clarifies the rule and 
     ensures that the rule reflects the analysis performed by 
     fiduciaries when making investment decisions.

[[Page H939]]

       We also support the removal of the special rule prohibiting 
     certain investment alternatives from being considered 
     qualified default investment alternatives (QDIA) because the 
     investment references ESG factors. The QDIA restrictions in 
     the Current Rules add uncertainty and would be difficult to 
     apply. We agree with the Department that there is not a 
     reason to prohibit fiduciaries from prudently selecting a 
     fund that meets the QDIA requirements and includes the 
     consideration of ESG factors.
       We support the Department's efforts to reduce the 
     uncertainty in the market caused by the Current Rules and we 
     suggest additional clarification regarding the use of 
     screens. We believe this clarification could further reduce 
     uncertainty that might otherwise prevent fiduciaries from 
     considering ESG factors which are expected to enhance 
     investment value and performance or improve investment 
     portfolio resilience against the potential financial risks.
       As noted above, we support the removal of ``pecuniary 
     factors'' and that a fiduciary's evaluation of an investment 
     or investment course of action should be based on factors 
     that ``are material to investment value''. We think that the 
     Department could add additional clarity to the rule or 
     preamble by clarifying that the proposed rule does not per se 
     prohibit a fiduciary from using a screen on investments based 
     in whole or in part on ESG factors.
       A common method used by investment managers to incorporate 
     ESG factors into the assessment of investment risks and 
     returns is the use of screens. As described in the Proposal, 
     ``negative screening refers to the exclusion of certain 
     sectors, companies, or practices from a fund or portfolio 
     based on ESG criteria.'' The Proposal's discussion of the 
     benefits that can occur from the use of ESG factors in the 
     assessment of investment risks and returns relies on sources 
     that studied the impact of investment managers using screens 
     based on ESG factors. However, the Current Rules and some 
     past guidance regarding the use of ESG factors could be read 
     to preclude the use of screens based on ESG factors.
       We suggest that the Department clarify in the final rule or 
     its preamble that the investment prudence duties and the 
     investment loyalty duties under Sections 2550.404a-1(b) and 
     2550.404a-1(c), respectively, do not per se prohibit the use 
     of screens. For example, it should be permissible for a plan 
     fiduciary to select investment managers and funds that use 
     screens to the extent that doing so would otherwise be 
     consistent with its duties. It should similarly be 
     permissible for any such investment manager to select an 
     ``investment course of action'' that uses a screen to the 
     extent that the resulting investment strategy would otherwise 
     be consistent with its duties. Such a clarification would 
     provide certainty to fiduciaries seeking to use ESG factors 
     in the assessment of investment risks and returns in 
     accordance with their prudence and loyalty duties. It would 
     further ensure that plan participants realize the full 
     benefits of fiduciaries using ESG factors as described in the 
     Proposal.
       We strongly support the Department's efforts to bring 
     clarity to the use of ESG factors and the exercise of 
     shareholder rights by plan fiduciaries. We believe the 
     Proposal and the changes suggested here will promote 
     retirement income security and further retirement savings by 
     allowing fiduciaries to better manage risks and improve 
     investment returns.
           Sincerely,

                                                Hanneke Smits,

                                          Chief Executive Officer,
     BNY Mellon Investment Management.
                                  ____



                                      Lazard Asset Management,

                                                December 12, 2021.
     Office of Regulations and Interpretations,
     Employee Benefits Security Administration,
     U.S. Department of Labor, Washington, DC.
       Dear Madam or Sir: Lazard Asset Management LLC (``LAM'') 
     submits the following comments regarding the above-referenced 
     proposal to amend the Investment Duties regulation under 
     Title I of the Employee Retirement Income Security Act of 
     1974, as amended (``ERISA''). See Prudence and Loyalty in 
     Selecting Plan Investments and Exercising Shareholder Rights, 
     29 CFR Part 2550, RIN 1210-AC03 (October 14, 2021), 86 Fed. 
     Reg. 57272 (the ``Proposed Rule'').
       LAM is pleased that the Department recognizes that climate 
     change and other ESG factors are often material to the 
     assessment of investment risks and returns. We agree with the 
     Department that the changes proposed not only would clarify 
     the duties of plan fiduciaries when selecting investment 
     options, but also would help individuals build retirement 
     income security and retirement savings. In particular, we 
     believe that the Proposed Rule, if adopted, will provide 
     plans with the freedom to leverage the advances that active 
     asset managers have contributed to ESG analysis and investing 
     in recent years.
       LAM is an investment adviser registered with the Securities 
     and Exchange Commission, with more than $239.8 billion of 
     assets under management as of September 30, 2021. We manage 
     assets on a discretionary basis for a large number of global 
     clients, including a variety of U.S. defined benefit plans, 
     defined contribution plans, individual retirement accounts, 
     and variable annuity portfolios.
       LAM's investment decisions are based on proprietary 
     fundamental and quantitative research techniques that our 
     professionals have developed over decades. Our firm seeks to 
     manage client portfolios in a way that delivers investment 
     performance, maximizes long-term shareholder value, and 
     limits unwanted risks--including the risks presented by ESG 
     factors.
       The Proposed Rule would allow plan fiduciaries to consider 
     a wider variety of factors when evaluating plan investment 
     options under Section 404(a) of ERISA, which sets forth the 
     standards of prudence that an ERISA fiduciary must satisfy 
     when selecting investments for a qualified plan. The Proposed 
     Rule is in response to the rule the Department adopted in 
     2020, Financial Factors in Selecting Plan Investments, 85 FR 
     72846 (Nov. 13, 2020) (the ``2020 Rule''), which is 
     interpreted generally to require plan fiduciaries to select 
     investments and investment courses of action based solely on 
     the consideration of ``pecuniary factors.'' The 2020 Rule 
     also contains a prohibition against adding or retaining any 
     investment fund, product, or model portfolio as a qualified 
     default investment alternative (QDIA) if the fund, product, 
     or model portfolio reflects non-pecuniary objectives in its 
     investment objectives or principal strategies.
       LAM agrees with the Department's overall assessment of the 
     2020 Rule expressed in Section 3 of the preamble of the 
     Proposed Rule--specifically, that the 2020 Rule (1) does not 
     properly reflect the scope of fiduciaries' duties under ERISA 
     to act prudently and solely in the interest of participants 
     and beneficiaries when evaluating investments and (2) creates 
     uncertainty surrounding whether a fiduciary under ERISA may 
     consider any ESG and other important factors in making 
     investment decisions. A number of Department bulletins and 
     pronouncements predating the 2020 Rule effectively guided 
     plan fiduciaries that they could consider adding ESG 
     investment options to their plans pursuant to Section 404(a). 
     See e.g., Interpretive Bulletin 2008-01, Interpretative 
     Bulletin Relating to Investing in Economically Targeted 
     Investments, 73 FR 61734 (Oct. 17, 2008); Interpretive 
     Bulletin 2015-01, Interpretive Bulletin Relating to the 
     Fiduciary Standard Under ERISA in Considering Economically 
     Targeted Investments, 80 Fed. Reg. 65135 (Oct. 26, 2015); and 
     Field Assistance Bulletin No. 2018-01 (April 23, 2018). The 
     2020 Rule changed the guidance and standards set forth in 
     those precedents.
       The Proposed Rule would add language in paragraph 
     (b)(2)(ii)(C) of the current regulation to recognize 
     explicitly that ``consideration of the projected return of 
     the portfolio relative to the funding objectives of the plan 
     may often require an evaluation of the economic effects of 
     climate change and other ESG factors on the particular 
     investment or investment course of action.''
       This would allow plan fiduciaries to evaluate factors that 
     many other investors already consider material. An analysis 
     of over 16,000 global firms over the period of 2016 to 2020 
     conducted by the Lazard Climate Center found investors are 
     actively pricing in risk from company emissions profiles. The 
     study found that with all else being equal, changes in 
     emissions profiles can have an impact on a company's market 
     valuation. For example, a hypothetical 10 percent decrease in 
     carbon dioxide emissions is associated with a 0.44 percent 
     price-to-earnings appreciation. In addition, the Swiss Re 
     Institute's April 2021 report The Economics of Climate 
     Change: No Action Not an Option, states that ``[t]he 
     transition towards a low carbon economy . . . has 
     repercussions for asset valuations. It is clear that climate 
     transition risks can have a substantial impact on equity and 
     credit valuations.'' Their analysis concludes that ``under 
     the current trajectory, global GDP could be 11-14 percent 
     less by mid-century than in a world without climate change.''
       LAM's research recognizes that there will be economic 
     winners and losers from the low carbon transition, and that 
     economically material factors should not be ignored in 
     investment analysis simply because they are of an 
     environmental, social, or governance nature. The Proposed 
     Rule properly grants fiduciaries the express permission to 
     consider material ESG factors in their investment 
     analysis, which we believe should result in promoting 
     retirement income security and more secure retirement 
     savings.
       The Proposed Rule ``confirms that a fiduciary may consider 
     any factor material to the risk-return analysis, including 
     climate change and other ESG factors'' (emphasis added). It 
     goes on to list numerous nonexclusive examples:
       (i) Climate change-related factors, such as a corporation's 
     exposure to the real and potential economic effects of 
     climate change, including its exposure to the physical and 
     transitional risks of climate change and the positive or 
     negative effect of Government regulations and policies to 
     mitigate climate change;
       (ii) governance factors, such as those involving board 
     composition, executive compensation, and transparency and 
     accountability in corporate decision-making, as well as a 
     corporation's avoidance of criminal liability and compliance 
     with labor, employment, environmental, tax, and other 
     applicable laws and regulations; and
       (iii) workforce practices, including the corporation's 
     progress on workforce diversity, inclusion, and other drivers 
     of employee hiring, promotion, and retention; its investment 
     in training to develop its workforce's skill; equal 
     employment opportunity; and labor relations.

[[Page H940]]

       We believe that the examples given in the Proposed Rule, 
     while necessarily incomplete, do serve the purpose of 
     providing adequate guidance to plan fiduciaries. We also 
     believe the Department's examples focus fiduciaries on 
     economically material considerations.
       At LAM, we have embedded ESG insights into our relevant 
     investment research and portfolio construction functions. We 
     have developed a proprietary ESG integration framework using 
     (among other things) materiality mapping, which is being 
     implemented across relevant investment platforms. As an 
     active asset manager that has incorporated ESG considerations 
     into its proprietary research, LAM is able to regularly 
     provide our clients with examples of how such considerations 
     have positively influenced investment outcomes. We have made 
     these investments into our platform because we believe that 
     investors--including plan fiduciaries--need to understand how 
     ESG factors impact the financial productivity, operational 
     risks, and valuations of the companies whose shares and bonds 
     are in their portfolios.
       Paragraph (c)(3) of the Proposed Rule amends the ``tie 
     breaker'' standard in the 2020 Rule to allow fiduciaries to 
     use broader discretion when comparing investment options. 
     Under the proposal, a fiduciary evaluating two suitable 
     investment options may select the ESG option over the non-ESG 
     option where both would ``equally serve the financial 
     interests of the plan over the appropriate time horizon,'' 
     instead of limiting the use of the ``tie-breaker'' standard 
     to situations in which both are ``economically 
     indistinguishable.'' LAM agrees with this more comprehensive 
     approach as it recognizes that fiduciaries should have the 
     freedom to choose an investment for the purposes of 
     diversification or to hedge against broad categories of risk, 
     both of which can lead to better financial performance for a 
     portfolio.
       The Proposed Rule rescinds paragraph (d)(2)(ii) of the 
     current regulation which prevents an investment option to 
     serve as a qualified default investment alternative (QDIA) if 
     it includes the use of non-pecuniary factors in its 
     investment objectives even if the option is prudent from a 
     risk and return perspective. LAM believes the 2020 Rule in 
     this regard is contrary to goals of ERISA as it could 
     potentially exclude financially prudent investment options on 
     the simple basis that they consider economically material ESG 
     factors. As previously stated, LAM believes that 
     consideration of economically material factors should not be 
     prohibited on the sole basis that they are of an 
     environmental, social, or governance nature.
       We believe that plan fiduciaries should include assessments 
     of material ESG issues when evaluating retirement plan 
     investments. The risks identified by an ESG-integrated 
     assessment are often ultimately detrimental, and the 
     opportunities identified can be quite additive, to the 
     financial performance and value of assets in an investment 
     portfolio. Importantly, the Proposed Rule greatly reduces the 
     current uncertainty surrounding a fiduciary's consideration 
     of material ESG factors. It restores trust in fiduciaries by 
     allowing them to use their professional judgement to evaluate 
     all material factors when selecting investment options for 
     plan participants and beneficiaries.
       In light of the foregoing, we recommend that the Department 
     adopt and implement the Proposed Rule as written. We would be 
     happy to provide the Department with additional information 
     concerning our comments. Any requests should please be 
     directed to our General Counsel, Mark Anderson.
       Respectfully submitted,
     Nikita Singhal,
       Co-Head Sustainable Investment & ESG.
     Jennifer Anderson,
       Co-Head Sustainable Investment & ESG.

  Mr. SCOTT of Virginia. Mr. Speaker, this is just a small sample of 
the financial industry's support for the underlying rule. We should not 
overturn the rule with this resolution.
  Mr. Speaker, for these reasons, I oppose H.J. Res. 30, I encourage 
all Members to do the same, and I yield back the balance of my time.
  Ms. FOXX. Mr. Speaker, I urge my colleagues to support H.J. Res. 30, 
to stop the Biden administration from decimating the retirement savings 
of millions of Americans.
  ESG funds will not give retirees the secure future they need. 
According to a former BlackRock senior executive, ESG funds 
underperformed the broader market compared to non-ESG funds over the 
last 5 years.
  Retirees are already worried about the rising costs of goods and 
services, not whether a company is using plastic straws in its 
cafeteria.
  Americans deserve to have a secure retirement. This means retirement 
plans need to focus solely on workers' financial interests. That is why 
I urge my colleagues to support this resolution.
  Mr. Speaker, I yield back the balance of my time.
  Ms. JACKSON LEE. Mr. Speaker, I rise in opposition to H.J. Res. 30, 
and I encourage my colleagues to vote against this measure.
  H.J. Res. 30 would nullify a Department of Labor rule concerning the 
fiduciary duties with respect to employee benefit plans.
  Under the rule issued on December 1, 2022, plan fiduciaries may 
consider climate change and other environmental, social, and governance 
(ESG) factors when they make investment decisions and when they 
exercise shareholder rights, including voting on shareholder 
resolutions and board nominations.
  One of my greatest joys as a Member of Congress is the opportunity to 
work on behalf of the people of the United States of America, to ensure 
that every voice is heard, and every right is upheld.
  In addition, the future of the American People relies heavily on 
thoughtful investments in key areas that include ESG as this is the 
backbone of our environment and the state of livelihoods of our growing 
communities.
  Under the Employee Retirement Income Security Act of 1974, 
fiduciaries of private pension plans must act in the interest of plan 
participants, including when making investment decisions.
  If participants want to invest their employee benefits into 
environmental, social, and governance factors, the government should 
not be against it just because it goes against a particular party's 
interests.
  The rule ``Financial Factors in Selecting Plan Investments,'' issued 
on November 13, 2020, required fiduciaries to make investment decisions 
based solely on ``pecuniary factors.''
  That rule included a ``tiebreaker'' standard, under which fiduciaries 
could consider other benefits when ``alternative investment options are 
economically indistinguishable.''
  The 2022 rule clarified how plan fiduciaries may consider climate 
change and other environmental, social, or governance (commonly 
referred to as ESG) factors when making investment decisions.
  Under the new regulation, fiduciaries may consider ``the economic 
effects of climate change and other environmental, social, or 
governance factors,'' but investment decisions ``may not subordinate 
the interests of the participants and beneficiaries in their retirement 
income or financial benefits under the plan to other objectives and may 
not sacrifice investment return or take on additional investment 
risk.''
  This bill establishes the disapproval of the final rule ``Prudence 
and Loyalty in Selecting Plan Investments and Exercising Shareholder 
Rights.''
  The world is seeing more climate related disasters than ever before.
  These disasters are greatly impacting the way that the public 
prepares their finances for potential strains.
  In 2017 Hurricane Harvey ravaged many communities in my home state 
and devastated the livelihoods of many working-class Americans.
  Many of my constituents experienced economic hardships that are still 
being felt today.
  With an increase in natural disasters, we must protect the American 
public and provide them with opportunities to invest in their needs.
  This point serves to acknowledge the importance we must put into our 
people and communities as things change and we continue to progress 
into the future.
  Strategic and thoughtful investments in our people, environments, and 
livelihoods should be of utmost importance.
  In essence, our future is dependent on how we invest in the now.
  The American people want a future, and we can provide that by 
thoughtfully planning through our strategic investments in the American 
people of all backgrounds and the diverse environments in which we aim 
to thrive in for decades to come.
  The SPEAKER pro tempore (Mr. DesJarlais). All time for debate has 
expired.
  Pursuant to the House Resolution 166, the previous question is 
ordered.
  The question is on the engrossment and third reading of the joint 
resolution.
  The joint resolution was ordered to be engrossed and read a third 
time, and was read the third time.
  The SPEAKER pro tempore. The question is on passage of the joint 
resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SCOTT of Virginia. Mr. Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

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