While the bill, which was introduced Feb. 23 by Rep. Suzan DelBene, D-Wash., Sean Casten, D-Ill., Rep. Juan Vargas, D-Calif., and Dean Phillips , D- Minn., would allow plan fiduciaries the option to consider ESG factors when making investment decisions, it does not mandate that they do so.
The same bill was introduced in the Senate on Feb. 16.
"Americans deserve a secure retirement, and ESG investments can be a key component in accomplishing that goal," Ms. DelBene said in a news release. "This bill would help provide workers and retirees a pathway to reach that secure retirement and invest in a sustainable world for future generations. This legislation would provide certainty to workers that these rules will be consistent going forward as they plan their retirement."
The Labor Department rule has faced steep pushback this year and on Tuesday, the House will vote on a resolution to nullify it under the Congressional Review Act. The CRA lets Congress disapprove — by a simple majority vote — a final rule issued by a federal agency if it has not been in effect for more than 60 legislative days.
With Republicans in control of the House and united in their opposition to the rule, the resolution will likely pass.
The same resolution in the Senate has support from all 49 Republicans and Sen. Joe Manchin, D-W.V., meaning the coalition needs one more Democratic vote to pass the resolution.
However, President Joe Biden would almost certainly veto the resolution if both chambers passed it.
Lisa M. Gomez, assistant secretary of labor for the Employee Benefits Security Administration, said the department considers the rule as a "return to neutrality and based on basic principles of ERISA," during a webinar earlier this month hosted by Ceres, a non-profit group working to advance sustainable investing. "The intent of the rule is to level the playing field so that plan fiduciaries can consider these ESG factors in investing in the same way they would consider any factors that would be relevant to a risk-and-return analysis."
Two lawsuits challenging the rule have also been filed in recent weeks, including one last month from a group of 25 Republican attorneys general.