U.S. Sens. Marsha Blackburn (R-TN) and Tom Cotton (R-AR) introduced legislation that would require investment advisors and retirement plan sponsors to focus primarily on financial factors, such as maximizing returns and minimizing risk, rather than those related to environmental, social and governance (ESG) factors.
Their bill, the Ensuring Sound Guidance (ESG) Act, is designed to have the focus on the best investment outcome for its investors.
“Asset managers such as Blackrock and Vanguard should principally focus their investments on yielding the highest return for investors,” Blackburn said. “These companies should not employ ESG standards to prioritize investments in companies that push woke climate change initiatives while pulling investments from traditional energy businesses. This bill would ensure investment fund managers make decisions that offer the greatest financial benefit to their clients, not push woke priorities.”
Sens. Mike Braun (R-IN), Ted Budd (R-NC), Kevin Cramer (R-ND), James Risch (R-ID), and Rick Scott (R-FL) are also co-sponsors of the legislation.
“Investment funds like Blackrock that millions of Americans’ trust with their hard-earned savings should prioritize investments that result in the highest returns—not fund ESG scams. My bill will make sure investment fund managers are making the best financial decisions on behalf of their clients,” Cotton said.
U.S. Rep. Andy Barr (R-KY) introduced companion legislation in the House this past June.