A group of House Democrats introduced two bills that would require retirement plan fiduciaries and investment advisers to take into account and explain how they consider environmental, social and governance factors when making investment decisions.
The Sustainable Investment Policies Act, which would amend the Investment Advisers Act, and the Retirees Sustainable Investment Policies Act, which would amend the Employee Retirement Income Security Act, stipulate that investment advisers and retirement plan fiduciaries must establish a sustainable investing policy that factors in considerations like corporate governance practices, labor and human rights compliance and environmental risks.
Reps. Andy Levin, D-Mich., vice chairman of the House Education and Labor Committee, Brendan Boyle, D-Pa., member of the House Ways and Means Committee, and Cindy Axne, D-Iowa, member of the House Financial Services Committee, sponsored the legislation.
"This is workers' money," Mr. Levin said Monday in a news release. "The investment process should be transparent to them and in line with workers' values. Fortunately, we are seeing that there is a convergence of sustainability values and diversity priorities in governance with durable performance over time. Companies perform better if they are aimed at where the economy is going, which is towards sustainability and inclusion across all aspects of how we build, how we make things, how we live and how we move about."
The bills are unlikely to move in the remaining days of the congressional session and will have to be reintroduced next Congress.