Congressional Republicans take on ESG and DEI investment of federal employees’ savings, which the Biden administration supports.
By Eileen Griffin
Republicans are seeking to stop the use of investment strategies driven by left-wing political agendas.
Sens. Ted Cruz (R-TX) and Eric Schmitt (R-MO) introduced a bill to stop the federal employees’ Thrift Savings Plan (TSP) from considering environment, social, and governance (ESG) factors and diversity, equity, and inclusion (DEI) in investment decisions, and Republicans in the U.S. House of Representatives filed a companion bill, The Center Square reported on June 14.
If the legislation passes, President Joe Biden is likely to veto them given the strong pro-ESG position of his administration.
Labor Department Promotes ESG
The U.S. Department of Labor (DOL) changed the guidance for plan fiduciaries, allowing them to select investments based on ESG and DEI, regardless of performance.
Prior to this ruling, fiduciaries were expected to invest TSP assets to provide the highest returns.
Republicans are filing these bills to slow the progression of government intrusion in investment decisions. These influences often force Americans into inadvertently supporting businesses in conflict with their values and traditions.
Major investment firms such as Blackrock can hold power over companies by only investing in those they deem sufficiently compliant with the leftist agenda. Blackrock holds investments for huge numbers of Americans through 401ks, IRAs, and pension plans.
Red, Blue Divide
While Republicans seek to deter the advancement of ESG and DEI, these efforts in blue states are growing and building momentum in Democrat-run blue states, wrote Chris Talgo, editorial director at The Heartland Institute, in an article published at RedState.
“More and more, Americans are becoming aware of the fact that ESG and DEI are nothing more than leftist Trojan horses,” wrote Talgo. “That is great news for those of us who support shareholder capitalism; and quite worrisome for the elitists and left-wing zealots who assumed they could pull the wool over our eyes with ESG and DEI.”
There is evidence of a decline in the popularity of ESG funds, The Epoch Times reported. As people become more knowledgeable about what ESG really is, they do not want to support it.
Red states are actively contributing to the decline of ESG funds by instituting laws against ESG. Consumers have played a role as well with boycotts and publicity campaigns.
Corporations Support
While the rejection of ESG funds is evidenced in recent asset declines, many corporations continue to promote the value of ESG programs within their organizations. Employers say they are committed to the strategy and their employees support it.
“In today’s volatile job market, top talent votes on their company’s social and environmental profile with their feet,” wrote Carolyn Berkowitz for Investment News. “Employees cite that they are more compelled to consider an employer, accept a job and/or stay with a company when their employer’s actions align with their personal values and provide opportunities to influence companies’ social impact work as part of their jobs.”
Critics of ESG are concerned ideological money managers and financial advisors will use customers’ assets to fund leftist causes. Powerful investment firms can pressure companies to comply with the ESG, which may result in discrimination against conservatives and Christians.
Secular Religion
The ideology behind ESG serves a secular worldview, Art Ally, founder and CEO of The Timothy Plan family of mutual funds and exchange traded funds, or ETFs, wrote in an article published by The Christian Post.
“If you are considering an ESG investment, take the time to look into its underlying philosophy,” wrote Ally. “You might find it contradicts your core values. If you seek to invest in a way that honors biblical principles, seek out Biblically Responsible Investments.”
The philosophical differences are clearly on display in the ESG debate.
“As conservative states fight ESG, liberal states have been ramping up demands that asset managers include ESG in their investment decisions,” wrote Kevin Stocklin for The Epoch Times.
Dissenters
Some Republican-led states, on the other hand, are refusing to use banks or credit unions that discriminate against industries or organizations that do not fit neatly into the ESG mold.
Elon Musk has called ESG “the devil” and “a scam,” One America News reported. Musk says ESG scores have been “weaponized by phony social justice warriors.”
“ESG funds are a money losing proposition,” Cruz said in a tweet. “You ought to be able to save for your retirement without Joe Biden hurting your savings!”
For more Budget & Tax News.
