DelBene, Casten, Vargas, Phillips Introduce Legislation to Support Sustainable Retirement Plans
Today, Representatives Suzan DelBene (WA-01), Sean Casten (IL-06), Juan Vargas (CA-52), and Dean Phillips (MN-03), introduced the Freedom to Invest in a Sustainable Future Act, legislation that would give workplace retirement plans the freedom to consider environmental, social, and governance (ESG) factors in their investment decisions or offer ESG investment options.
Relatively few workplace retirement plans, such as pensions and 401(k) plans, take into consideration sustainable investing principles in their investment decisions, despite the high demand for sustainable investment options and the desires of many employees and retirees for such plans.
Uncertain and frequently shifting legal environments are among the main obstacles to increasing ESG investing options. The Trump administration imposed prohibitive restrictions on the consideration of ESG factors by retirement plans. Last year, the Biden administration removed and replaced that rule, restoring the ability for plans to make sustainable investments. However, the new regulation is currently subject to a legal challenge and is the target of Republican efforts to overturn it.
The Freedom to Invest in a Sustainable Future Act would eliminate this uncertainty, providing retirement plans the freedom to decide whether to include ESG issues in their investment decisions or to provide ESG investment options to plan participants.
“Americans deserve a secure retirement and ESG investments can be a key component in accomplishing that goal. This bill would help provide workers and retirees a pathway to reach that secure retirement and invest in a sustainable world for future generations,” said DelBene. “This legislation would provide certainty to workers that these rules will be consistent going forward as they plan their retirement.”
“Climate risk is financial risk,” said Casten. “Retirement plan fiduciaries should be free to consider climate change and other ESG factors without regulatory barriers or the threat of litigation. I'm proud to support this legislation that gives workers the option to invest in the best plans for their future.”
“It’s essential for Congress to ensure that sustainable investment options are accessible to workers across America,” said Vargas. “With research showing that 80% of investors plan to consider environmental, social and governance factors in their investment strategies, Representative Suzan DelBene’s bill is not only the right thing to do – but it’s the financially smart thing to do. This critical piece of legislation ensures that workplace retirement plans can consider material ESG risk factors and maximize financial returns for plan beneficiaries.”
The text of the Freedom to Invest in a Sustainable Future Act can be found here.
Tags: Environment, Jobs and the Economy, Seniors