Protecting Prudent Investment of Retirement Savings Act
Floor Speech
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Mr. DeSAULNIER. Mr. Speaker, I thank the ranking member for yielding and for his leadership in opposition to this bill.
Environmental, social, and governance are factors that retirement plan fiduciaries may consider when making investments on behalf of retirement plans covered by ERISA. Factors that may fall within ESG include impact of the company's actions on climate change, working conditions, and employee safety at the company, and its management structure.
Weighing ESG factors when making investment decisions is not only more socially responsible, it is also more fiscally responsible for the type of long-term investments managed by retirement plan fiduciaries. Factors like sea level rise due to climate change, child labor violations, or track records for mistreating workers could cause unnecessary investment risks over time. Investors should be protected from those kinds of unethical management practices. That is why it should be considered a best practice for retirement plan professionals to appropriately weigh ESG factors--just weigh them.
Unfortunately, this bill would establish unnecessary barriers to retirement plan fiduciaries who want to consider these factors. This is despite the fact that even those fiduciaries who consider ESG factors are still required under ERISA to run plans solely in the best interest of participants and fiduciaries.
I filed an amendment to this bill that would permit plan fiduciaries to consider ESG factors when they make investment decisions, which aligns with the Biden administration's ESG rule that was upheld twice by Federal district courts before being abandoned by the Trump administration.
Crucially, my amendment would have also upheld core ERISA protections and explicitly ensured that fiduciaries do not sacrifice investment returns when they consider ESG factors. Unfortunately, House Republicans and House Republican leadership prevented the amendment from being approved in the committee.
Mr. Speaker, we should trust the professionals who are legally obligated to make prudent decisions on behalf of retirement plan participants, not undermine their ability to make sound investment decisions.
Mr. Speaker, I urge my colleagues to oppose H.R. 2988. Once again, I thank the ranking member for his leadership.
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