Ranking Member Scott Led Opposition to Extreme Republicans’ H.R. 5339
Trust professionals bound by law - not extreme House Republicans - to make decisions about Americans retirement savings
WASHINGTON – Today, Ranking Member Robert C. “Bobby Scott” delivered the following floor remarks in opposition to House Republicans’ H.R. 5339. The so-called “Protecting Americans’ Investments from Woke Policies Act” combines four Republican bills that perpetuate a misguided attack on ESG investing and undermine retirement professionals’ abilities to make investment decisions on behalf of workers.
Watch Ranking Member Scott’s floor remarks on YouTube.
“Thank you. Mr. Speaker, I yield myself such time as I may consume.
“I rise in opposition to H.R. 5339, the so-called Protecting Americans' Investments from Woke Policies Act. This bill packages four separate bills that the Committee on Education and the Workforce reported on party-line votes last September.
“H.R. 5339 relates to what’s known as environmental, social, and governance – or E-S-G – investing.
“Many of us believe that workers should be able to invest in a way that reflects their values—whether combating climate change or promoting health and labor standards—without sacrificing investment returns.
“And – to be clear – this kind of investing is not at odds with making a profit. In fact, it makes good financial sense to carefully consider investments that account for companies’ negative externalities, such as high liability risks, fossil fuel-dependent business practices, or vulnerability to sea level rise. Like whether or not an asset is going to be under water in 50 years. It would be nice to know that, but you shouldn’t be prohibited from considering it. These are among the factors that could cause a stock to suffer over a long-term time horizon.
“Considering workers often contribute to their retirement accounts for decades before drawing down their savings, it makes perfectly good sense for those managing workers’ accounts to consider long-term impacts when making investment decisions.
“E-S-G investing is a sound, profit-centered risk mitigation strategy, and the financial services industry recognizes this. For example, State Street Global Advisors—one of the largest asset managers—noted that, as a fiduciary, they have – and I quote – “a duty to act prudently and in the best interests of their clients, which, increasingly includes consideration of environmental, social, and governance factors relevant to the performance of the companies in which our clients invest.” Close quotes.
“The Trump Administration issued a rule that imposed needless barriers and onerous requirements related to E-S-G investing. Fortunately, the Biden-Harris Administration reversed course and finalized a sensible rule clarifying that plan fiduciaries may consider E-S-G factors when they make decisions for retirement plan participants. To be clear, the Biden-Harris Administration’s rule is not a mandate.
“H.R. 5339 codifies the Trump-era E-S-G rule. It also codifies a Trump-era rule that would disenfranchise plan fiduciaries from exercising their shareholder rights on behalf of workers.
“The bill also undermines efforts to increase diversity among asset managers. This is a worthwhile endeavor, as the GAO noted a few years ago, only one percent of the $70 trillion in global assets under management are managed by firms owned by women or people of color. There’s also research to suggest that non-diverse firms do not outperform diverse firms across all asset classes.
“In sum, H.R. 5339 takes us backwards and undercuts the retirement professionals who are legally bound to make prudent decisions for workers and retirees.
“I urge opposition to this bill and reserve the balance of my time.”
Read a fact sheet on H.R. 5339 here.
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