A rider is a nongermane amendment to a bill that changes the law for a program funded by that bill, according to the Senate glossary. Casten and Vargas are co-chairs of the Congressional Sustainable Investment Caucus, which aims to inform policy related to environmental, social and governance investing.
While the start of the fiscal year technically began in October, Congress has yet to pass annual appropriations legislation, which has become a common occurrence in Washington. Instead, in mid-January, Congress passed another stopgap funding bill, extending the deadlines for one set of appropriations bills to March 1, and another set to March 8.
As the lawmakers point out in their letter, draft appropriations bills in the House have included several riders aimed at blocking sustainable investing.
One amendment would block implementation of the Labor Department's rule allowing retirement plan fiduciaries to consider ESG factors in their investment decisions. The rule, which took effect in January 2023, has faced strong pushback, including an attempt to nullify the rule via the Congressional Review Act. President Joe Biden used the first veto of his administration in March to overturn a joint resolution in the House and Senate that would have blocked the rule.
Another rider would prohibit federal funding from being used toward finalization or implementation of the SEC's proposed climate disclosure rule. That rule, first proposed in March 2022, would require public companies to disclose a variety of climate-related information in their registration statements and periodic reports, including greenhouse gas emissions. Republican lawmakers have been very outspoken about their opposition to the rule, though the SEC has yet to finalize it.
In a separate amendment, the Thrift Savings Plan, Washington, would be prohibited from investing in mutual funds that consider ESG factors. The $845 billion Thrift Savings Plan serves as the retirement plan for federal employees and uniformed services members and is administered by the Federal Retirement Thrift Investment Board. In May, Rep. Chip Roy, R-Texas, reintroduced a bill to prevent the TSP from investing in funds that consider ESG criteria, though the bill has not moved out of committee.
Other riders are aimed at blocking funding for a rule requiring climate-related disclosure from federal defense contractors, and prohibiting funding for the promotion of or contribution toward ESG investments.
"Political interference to limit consideration of certain risks and opportunities that companies, investors, and asset managers may consider undermines Americans' confidence that the fiduciaries responsible for public treasury, pension, and retirement funds are maximizing returns and avoiding known risks," the lawmakers wrote.