Roll Back Esg to Increase Retirement Earnings Act
Floor Speech
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Ms. FOXX. Mr. Speaker, pursuant to House Resolution 1455, I call up the bill (H.R. 5339) to amend the Employee Retirement Income Security Act of 1974 to specify requirements concerning the consideration of pecuniary and non-pecuniary factors, and for other purposes, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
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Ms. FOXX. 5339.
Mr. Speaker, I rise today in full support of the Republican fight against the woke, progressive agenda.
The Committee on Education and the Workforce is proud to lead debate on the Protecting Americans' Investments from Woke Policies Act, or H.R. 5339, a bill that would confront and dispatch one of the most nefarious and hidden forms of wokeness.
Wokeness comes in all shapes and sizes. It is a problem when it is pushed at your local public school. It is an existential threat to the country when it is pushed by the institutions that police how we think, what we say, and where our money goes.
Wokeness destroys everything it touches, including the value-neutral institutions that America used to take for granted.
First, wokeness conquered academia. Then, it conquered the media. The final frontier of the woke mind virus is the banks and capitalism itself.
You may say, what? Banks are woke? They are driven by things like profit motive and the markets. Well, we need to think again.
Under the guise of a practice known as environmental, social, and governance investing, or ESG for short, banks are responsible for woke social engineering on a scale that history's authoritarians could only dream of.
In essence, a big bank or asset manager will take your hard-earned pension or 401(k) and invest it in radical, progressive causes. These ESG funds exclude businesses deemed insufficiently woke.
What may disqualify a company from receiving woke capital is including, but not limited to, too many White, straight men on the board, too much profit in the oil and gas industry, or too many politically incorrect takes by your CEO on X, formerly known as Twitter.
That the S&P 500's ESG index delisted a green company like Tesla only proves the point that ESG is nothing but a woke power grab.
Concerns about the environment are secondary to enforcing bland, progressive conformity. What is more, ESG factors guide about one- fourth of all assets under management, or $30 trillion.
Yet, these funds underperformed when compared to their conventional peers. Take this from the Financial Times: ``Over the past 12 months, global sustainable equity funds made an 11 percent return, compared with 21 percent for conventional stock funds, according to a May report from JPMorgan.''
Sacrificing pensions and retirement income for woke impact should be illegal. This legislation makes it clear that other people's retirement income may not be sacrificed for woke impact.
Pensioners forged the infrastructure that powers modern American cities. Pensioners built the industries that make America great.
Pensioners put their life and work into this country, and they don't want their hard-earned nest egg deflating because its principal is serving political causes.
I especially thank Representative Allen from Georgia, Representative Houchin from Indiana, Representative Good from Virginia, and Representative Banks from Indiana for leading this charge on behalf of pensioners and retirees.
The Protecting Americans' Investments from Woke Policies Act is a product of their hard work, and it is the necessary first step toward making ESG investing illegal under certain retirement plans.
Mr. Speaker, I urge a ``yes'' vote on H.R. 5339 and reserve the balance of my time.
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Ms. FOXX.
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Ms. FOXX. My colleagues on the other side of the aisle have made many claims about the supposed advantages of ESG, just now saying that ESG funds tend to do better.
Well, let me set the record straight. ESG funds have underperformed for years. According to a Bloomberg report, the 10 largest ESG funds posted double-digit losses in 2022, and 8 of the 10 performed worse than the S&P 500.
It is no surprise that in 2023, according to The New York Times, investors pulled $13 billion out of ESG funds.
Another study from Boston University found there is little reason to infer that ESG criteria is reliable for predicting stock returns. I think it is really important to set the record straight.
To make matters worse, ESG products charge higher fees to participants than traditional investment funds, which can significantly reduce participants' retirement savings over time.
Finally, according to researchers at George Mason University, ESG funds expose workers and retirees to additional investment risk.
Increased costs, increased risk, and lackluster returns make for a bad cocktail. Weakening the investment portfolios is not what we should be doing here.
I yield 3 minutes to the gentleman from Virginia (Mr. Good).
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Ms. FOXX. Madam Speaker, I yield 2 minutes to the gentlewoman from Illinois (Mrs. Miller).
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Ms. FOXX. I ask that the speaker's words be taken down.
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Ms. FOXX. Mr. Speaker, I withdraw my demand.
Mr. Speaker, it is important, I think, that we again set the record straight. The RETIRE Act codifies the principles in the Trump Labor Department rule on retirement plan ESG investing. Under this bill, as with the Trump rule, if a fiduciary finds that an ESG factor is a pecuniary or financial factor, then that factor can be considered when investing and exercising shareholder rights. Nothing in the Trump rule prevents a fiduciary from appropriately considering any material risk with respect to investment.
Like the Trump rule, the RETIRE Act recognizes ESG factors can present an economic risk or opportunity, which qualified investment professionals would appropriately treat as material economic considerations under generally accepted investment principles.
This bill neutrally applies financial investment principles to all investment decisions. To suggest that this bill bars a fiduciary from appropriately considering any factors that may be material to an investment is blatantly false. Unlike the Biden-Harris rule, this legislation is neutral regarding fiduciaries' prudent decisions.
Mr. Speaker, we have heard today about the riskiness of ESG. We have heard about the radicalness of ESG. We have heard about the racism inherent in ESG investing.
If today's debate has proven one thing, it is that wokeness will not be satisfied until the entire country thinks the same way.
To my colleagues, I urge that we return to the neutral fiduciary standard. Let's quit playing ideological games that have a real impact on workers' livelihoods.
To my banking-sector friends, I will put it this way: There is no alpha in ESG. Our adversaries will surpass the American financial industry if we continue down this path.
The Protecting Americans' Investments from Woke Policies Act would safeguard our financial system from politically driven agendas, ensuring that capital is allocated based on merit and performance, not ideology.
For these reasons, I support its passage, and I yield back the balance of my time.
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