Murray reminds colleagues Biden rule ensuring asset managers have the freedom to consider environmental, social, and governance factors is neutral on whether such factors are considered from left or right perspective
Senator Murray: “Despite how badly some of my colleagues seem to be missing the point, at the end of the day, this is actually pretty simple: Financial security is about planning for the future, and you just can’t plan for the future if you aren’t allowed to consider the environmental, social, and governance factors that are shaping it.”
***WATCH: Senator Murray’s floor remarks***
(Washington, DC) – Today, U.S. Senator Patty Murray (D-WA), spoke on the Senate floor urging her colleagues to oppose a resolution to rescind the Biden Administration’s rule, which ensures retirement plan managers can take environmental, social, and governance (ESG) issues under consideration when making investment decisions. In her remarks, Senator Murray rebutted recent misrepresentation of ESG investing as ‘woke’ or partisan, and made clear the Biden administration’s rule is neutral regarding how advisors take those consideration into account—so long as they are meeting their legal obligation as a fiduciary to put clients’ financial interests first.
“This is a really important point I think folks are missing: the Biden rule is fundamentally neutral on how ESG factors are taken into consideration so long as the investment fund is meeting its fiduciary obligations to its beneficiaries. I’m not sure everyone gets that—because the fact of the matter is, some of the same people railing against this rule, and against ESG investing, have advocated for positions that essentially are ESG investing,” said Senator Murray. “The rule we are talking about is neutral on whether a fiduciary is considering these factors from a particular perspective.”
“This rule isn’t about saying the left or the right take on a given environmental, social, or governance issue is ‘correct,’” continued Senator Murray. “It’s about acknowledging these factors are reasonable for asset managers to consider. It’s about risk mitigation to safeguard retirement plan savers’ nest eggs. It’s about letting these asset managers do their jobs without government getting in the way. That should not be controversial—it should be common sense.
Senator Murray has been a leader on ensuring financial advisors have the freedom to consider ESG factors—from her criticism of the Trump Administration’s rule that was designed to discourage ESG investing—including comment letters from Democrats she led opposing that proposal, to being a leading sponsor of legislation supporting neutrality for ERISA investments, to her efforts encouraging the Biden Administration’s work on the rule they ultimately put forward to support ESG investment strategies.
Full text of Senator Murray’s remarks, as prepared for delivery, are below and video HERE:
“Thank you, M. President.
“I’ll be honest—based on the arguments I have been hearing, I’m not sure everyone opposing the Biden Administration’s ESG rule has read the actual policy. Some of the arguments for the resolution overturning this rule simply don’t add up—they are a contradiction.
“ESG investing is simply the practice of taking into account the environmental, social, and governmental practices of companies you invest in. So, for instance, just as a hypothetical, if you are against investing in so-called ‘woke causes’—you are actually laying out your own ESG criteria. And here’s the thing—the Biden Administration rule would allow that.
“Because—and this is a really important point I think folks are missing—the Biden rule is fundamentally neutral on how ESG factors are taken into consideration so long as the investment fund is meeting its fiduciary obligations to its beneficiaries. I’m not sure everyone gets that—because the fact of the matter is, some of the same people railing against this rule, and against ESG investing have advocated for positions that essentially are ESG investing.
“When Republicans push for legislation to protect local and state governments that divest from companies based on their policies toward Israel—that is a form of ESG investing.
“It’s also worth noting, if you manage a retirement plan for a faith-based organization and you want to make sure you are investing in accordance with your client’s faith—that too would be ESG investing.
“And when we call for divesting from foreign adversaries due to human rights and national security concerns—again, we are talking about ESG investing.
“And if anyone wants to argue that is different, that it is a matter of national security, I’ll just note, there’s no question climate change is also a really serious national security issue. But M. President—that’s honestly all beside the point here.
“Because, let me say it again, the rule we are talking about is neutral on whether a fiduciary is considering these factors from a particular perspective. This rule isn’t about saying the left or the right take on a given environmental, social, or governance issue is ‘correct.’
“It’s about acknowledging these factors are reasonable for asset managers to consider. It’s about risk mitigation to safeguard retirement plan savers’ nest eggs. It’s about letting these asset managers do their jobs without government getting in the way. That should not be controversial—it should be common sense.
“I mean think about it.
“When it comes to environmental factors: shouldn’t financial advisors have the freedom to consider environmental practices when climate disasters cost trillions of dollars a year? Shouldn’t they have the freedom to take into account whether a company is adopting sustainable practices that reduce its costs and consumption or if it is moving to clean energy that makes it less reliant on foreign oil?
“And when it comes to social factors, we live in a diverse nation—that’s part of what makes our country so vibrant, and strong. Shouldn’t financial advisors have the freedom to consider whether companies are doing the most to tap into that strength? Shouldn’t they have the freedom to account for whether companies are well situated to serve and speak to the broadest range of people or to grow by reaching communities who are currently underrepresented in their customer base?
“And when it comes to how companies are governed, we are facing workforce shortages. Companies are having huge challenges finding and retaining workers. So shouldn’t financial advisors have the freedom to consider how well companies are paying their workers, how seriously they take safety, and issues like workplace harassment, or what sort of benefits they provide to retain workers—like child care, paid leave, and more?
“These are concrete factors that have huge implications for companies’ bottom lines.
“So why wouldn’t we give advisors the freedom to consider them? Why do Republicans want to tie their hands and meddle in the free market by reversing this balanced, neutral rule?
“M. President, despite the misunderstandings and misrepresentations. Despite how badly some of my colleagues seem to be missing the point, at the end of the day, this is actually pretty simple: Financial security is about planning for the future, and you just can’t plan for the future if you aren’t allowed to consider the environmental, social, and governance factors that are shaping it.
“I urge my colleagues to join me in voting against this resolution.”
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