[Congressional Record Volume 169, Number 39 (Wednesday, March 1, 2023)]
[Senate]
[Page S541]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                    Department of Labor Rule Repeal

  Now on ESG, later today, my Republican colleagues will force a vote 
here on the floor to reverse a Labor Department rule allowing 
retirement fiduciaries to use ESG, if they so wish, when evaluating 
investments.
  I will strongly oppose this ill-considered proposal. My reasons, 
which I will outline in a minute, are also outlined in an op-ed in the 
Wall Street Journal editorial page today.
  Mr. President, I ask unanimous consent to have printed in the Record 
an op-ed from the Wall Street Journal editorial page.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal Feb. 28, 2023]

                  Republicans Ought To Be All for ESG

                        (By Charles E. Schumer)

       Investing in a free-market economy involves choice. There 
     are 8,000 securities listed on U.S. stock exchanges alone. 
     Investors take many different factors into account when 
     evaluating their investment decisions. Three such factors--
     environmental, social and governance, also known as ESG--have 
     recently gotten a lot of attention from some more 
     conservative Republicans, including Florida Governor Ron 
     DeSantis.
       In the House, Republicans just passed a bill that would 
     reverse a Labor Department rule recognizing that retirement 
     fiduciaries may use ESG when evaluating investments. That 
     bill will soon come before the Senate. I will strongly oppose 
     this ill-considered proposal.
       ESG opponents are trying to turn it into a dirty acronym, 
     deploying attacks they have long used for elements of a so-
     called woke agenda. They call ESG wokeness. They call it a 
     cult. They call it an incursion into free markets. We've 
     heard it all before. I say ESG is just common sense.
       Republicans conveniently ignore something very important: 
     America's most successful asset managers and financial 
     institutions have used ESG factors to minimize risk and 
     maximize their clients' returns. In fact, according to 
     McKinsey, more than 90% of S&P 500 companies publish ESG 
     reports today.
       This isn't about ideological preference. Investors and 
     asset managers increasingly recognize that maximizing returns 
     requires looking at the full range of risks to any 
     investment--including the financial risks presented by 
     increasingly volatile natural disasters, aging populations 
     and other threats that the public doesn't normally associate 
     with financial modeling.
       Nothing in the Labor Department rule imposes a mandate. It 
     simply states that if fiduciaries wish to consider ESG 
     factors--and if their methods are shown to be prudent--they 
     are free to do so. Nothing more, nothing less.
       The present rule gives investment managers an option. The 
     Republican rule, on the other hand, ties investors' hands.
       Sen. Rick Scott asserted that the Labor Department rule 
     ``allows Wall Street fund managers to make choices on behalf 
     of Americans based on their own beliefs and social agenda.'' 
     Yet his Republican colleagues have introduced bills requiring 
     fiduciaries to consider factors that don't strictly relate to 
     financial returns, including whether a particular investment 
     has ties to Russia or the Chinese Communist Party.
       For some Republicans, these are all perfectly fine extra-
     financial considerations. But when it comes to investing in 
     workers, or hedging against the dangers of a changing 
     climate, or guarding against risks of corporate malfeasance--
     suddenly that's a bridge too far. You can't have it both 
     ways.
       Republicans talk about their love of the free market, small 
     government and letting the private sector do its work. But 
     their obsession with eliminating ESG would do the opposite, 
     forcing their own views down the throats of every company and 
     investor. Republicans would prevent investors from adapting 
     to the future, for their own good and the good of the 
     country.
       I say let the market work. If that naturally leads to 
     consideration of ESG factors, then Republicans should 
     practice what they've long preached and get out of the way.

  Mr. SCHUMER. Republicans have been trying mightily to turn ESG into 
their newest dirty little acronym. They are using the same tired 
attacks we have heard for a while now--that this is more wokeness, that 
it is intrusion into the markets, and on and on and on.
  But Republicans are missing or ignoring an important point: Nothing 
in the DOL rule imposes a mandate.
  Again, let me repeat that: Nothing in the rule they seek to undo 
imposes a mandate.
  It merely says that if fiduciaries wish to look at ESG factors and if 
their methods are shown to be prudent--it is a very narrow rule--then 
they have the freedom to do so--the freedom to do so. It is literally 
allowing the free market to do its work.
  This isn't about ideological preference. It is about looking at the 
biggest picture possible for investors to minimize risk and maximize 
returns.
  Why shouldn't you look at the risks posed by increasingly volatile 
climate incidents? Why shouldn't they consider aging populations or 
other trends that could impact their portfolio?
  In fact, more than 90 percent of S&P 500 companies already publish 
ESG reports today.
  The present rule gives investment managers an option. The Republican 
rule, on the other hand, ties investors' hands--no freedom for 
companies to choose what they think is right.
  Republicans talk about their love of the free market, small 
government, ``let the private sector do its work,'' but their obsession 
with eliminating ESG would do the opposite, forcing their own views 
down the throats of every company and every investor.
  I say: Let the market work. Let the market work. Mr. and Mrs. Free 
Market Republicans, what the heck are you doing here? Imposing your 
views on these companies?
  If the market naturally leads to the consideration of ESG factors, 
then Republicans should practice what they have long preached and get 
out of the way.