EC Georgia News

U.S. Congressmen Rick W. Allen (GA-12) and Andy Barr (KY-06) reintroduced the Ensuring Sound Guidance (ESG) Act to protect retail investors’ retirement and investment accounts from asset managers who put environmental, social, and governance, or ESG, factors ahead of returns.

This legislation would require investment advisers and Employee Retirement Income Security Act (ERISA) retirement plan sponsors to prioritize financial returns over non-pecuniary factors when making investment decisions on behalf of their clients. Following the bill's introduction, Reps. Allen and Barr issued the statements below:

"Retirement plan sponsors have a duty to invest their clients’ hard-earned money in a manner that maximizes returns and minimizes risk. Yet, President Biden’s DOL is desperately clinging to its flawed rule that would allow financial advisors to invest Americans’ retirement savings in climate-related ESG funds, which are proven to carry higher risk and charge steeper fees. Americans deserve choice when it comes to their financial future, and while President Biden seeks to inject his radical political agenda into workers’ retirement accounts, I am proud to re-introduce the Ensuring Sound Guidance Act with Representative Barr to protect Americans’ savings from politically motivated mismanagement," said Rep. Rick W. Allen. "This critical legislation not only ensures advisors are making sound investment decisions based on monetary factors, but also empowers participants to decide how their money is invested—contrary to the DOL’s finalized rule. As Americans continue to grapple with the financial burden of higher costs across the board, we must take meaningful action to protect ERISA retirement plans from this administration’s endless pursuit of their costly, rush-to-green agenda."

"Asset managers should be in the business of maximizing returns for investors, not pushing their own political agenda at the expense of everyday Americans. Our proposed legislation safeguards the savings efforts of hardworking Americans. This critical legislation not only guarantees that advisers make prudent investment choices based on financial factors, but also empowers savers to decide how their money is invested, contrary to the Department of Labor's (DOL) finalized rule," said Rep. Barr. "We must take significant action to protect retail investors and retirees from the cancer within our capital markets that is ESG, which prioritizes higher-fee, less diversified and lower return investments."

The ESG Act is endorsed by the American Petroleum Institute (API), Heritage Foundation, FreedomWorks, Club for Growth, Americans for Prosperity, Americans for Tax Reform (ATR), American Free Enterprise Chamber of Commerce, Competitive Enterprise Institute (CEI), Advancing American Freedom, National Mining Association (NMA), National Shooting Sports Foundation (NSSF), Texas Public Policy Institute, West Virginia State Treasurer’s Office, Kentucky State Treasurer’s Office, Louisiana State Treasurer’s Office, North Dakota State Treasurer’s Office, South Carolina State Treasurer’s Office, Indiana State Treasurer’s Office, Oklahoma State Treasurer’s Office, Idaho State Treasurer’s Office, Texas State Treasurer’s Office, North Carolina State Treasurer’s Office, and Arkansas State Treasurer’s Office and the Kentucky Coal Association. 

Original source can be found here.