Washington, D.C. – Senate Majority Leader Chuck Schumer (D-NY) today spoke on the Senate floor denouncing Republican efforts to reverse a Labor Department rule allowing retirement fiduciaries to consider environmental, social and corporate governance principles in decision-making. Below are Senator Schumer’s remarks, which can also be viewed here:
Later today, my Republican colleagues will force a vote here on the floor to reverse a Labor Department rule allowing retirement fiduciaries to use ESG—if they so wish—when evaluating investments. I will strongly oppose this ill-considered proposal. My reasons, which I'll outline in a minute, are also outlined in an op-ed in The Wall Street Journal editorial page today.
Republicans have been trying mightily to turn ESG into their newest dirty little acronym. They’re using the same tired attacks we’ve heard for a while now—that this is more wokeness, that it is an intrusion into markets and on and on and on.
But Republicans are missing—or ignoring—an important point: nothing in the DOL rule imposes a mandate. Again, let me repeat that: nothing in the rule they seek to undo imposes a mandate. It merely says that if fiduciaries wish to look at ESG factors—and if their methods are shown to be prudent, it’s a very narrow rule—then they have the freedom to do so—the freedom to do so! It is literally allowing the free market to do its work.
This isn’t about ideological preference—it’s about looking at the biggest picture possible for investors to minimize risk and maximize returns. Why shouldn’t you look at the risks posed by increasingly volatile climate incidents? Why shouldn’t they consider aging populations or other trends that could impact their portfolio? In fact, more than 90% of S&P 500 companies already publish ESG reports today.
The present rule gives investment managers an option. The Republican rule, on the other hand, ties investors’ hands. No freedom for companies to choose what they think is right.
Republicans talk about their love for the free market, small government, let the private sector do its work. But their obsession with eliminating ESG would do the opposite, forcing their own views down the throats of every company and every investor.
I say let the market work. Let the market work. Mr. and Mrs. Free Market Republicans, what the heck are you doing here, imposing your views on these companies? If the market naturally leads to consideration of ESG factors, then Republicans should practice what they’ve long preached and get out of the way.