Oct 19 2021
Washington, D.C. — U.S. Senator Marco Rubio (R-FL) issued a statement after the Biden Administration’s Department of Labor proposed a new regulation that would redefine the fiduciary duties of fund managers under the Employee Retirement Income Security Act (ERISA) to allow fund managers to consider “climate-change related factors” and “progress on workforce diversity [and] inclusion” when investing the savings of fund beneficiaries.
“Following the lead of Wall Street and corporate America, President Joe Biden wants the investment of workers’ and retirees’ hard-earned savings to advance progressive, woke social policies instead of their best interests,” Rubio said. “This is the latest example of how the political left works. They want to remake the entire country to comply with the latest woke agenda. And with this rule, the political left’s allies on Wall Street and corporate America will be free to do it with no recourse for the workers and retirees harmed by it.”
The Department of Labor’s proposed rule would amend the regulation of investment duties under ERISA to allow fund managers to consider “climate change-related factors” and “the corporation’s progress on workforce diversity [and] inclusion.” ERISA is a federal law that requires the fund managers of covered retirement and benefit plans, which cover 141 million workers and beneficiaries and nearly $8 trillion in assets, to act solely in the interests of their beneficiaries. After progressive activists successfully pushed Wall Street to begin investing trillions in progressive social causes under the guise of the “Environmental, Social, and Governance” (ESG) movement, the Trump Administration in 2020 clarified that ESG considerations unrelated to pecuniary interests were not protected by ERISA. Earlier this year, the Biden Administration announced it would not enforce the Trump Administration rule. The current proposed rule would reverse the Trump Administration rule in key respects by explicitly allowing for the consideration of ESG concepts.
Last month, Rubio introduced the Mind Your Own Business Act, which would enhance shareholders’ ability to hold corporate managers accountable for using corporate resources to advance progressive, woke social policies rather than invest in their businesses. Writing in the Harvard Law School Forum on Corporate Governance, Rubio called the public support by large corporations for socially progressive ideologies a “crisis of legitimacy” for corporate America.
In June 2021, Rubio introduced the TSP Fiduciary Security Act, which would modify the definition of best interest for the federal government’s Thrift Savings Plan, which is tasked with managing the retirement savings of federal civil servants, to include a duty not to harm national security.