Feb. 2—Two West Virginia lawmakers are challenging a push by the Biden administration to prioritize environmental and social factors over financial returns when deciding the retirement investments for millions of Americans.

U.S. Senator Joe Manchin, D-W.Va., and U.S. Senator Shelly Moore Capito, R-W.Va., announced Wednesday that they would challenge the Biden Administration's ESG (environmental, social, and corporate governance) rule, which Manchin and Capito argue prioritizes politics over ensuring the best retirement investments for Americans.

More than 50 senators have joined in the disapproval resolution, which will receive a vote on the Senate and House floors, Capito and Manchin said in a joint statement.

Biden's proposed environmental and social rules would endanger the retirement incomes of more than 150 million Americans, including residents of West Virginia, Manchin said.

"At a time when our country is already facing economic uncertainty, record inflation and increasing energy costs, it is irresponsible of the Biden Administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes," Manchin said. "I'm proud to join this bipartisan resolution to prevent the proposed ESG rule from endangering retirement incomes and protect the hard-earned savings of American families. I encourage my colleagues on both sides of the aisle to support this important resolution to ensure Congress is promoting economic security for West Virginians and Americans, not further exacerbating the serious economic challenges they are already facing."

Capito said the ESG rule would pressure investors to fund the administration's green energy and "woke" social agenda at the expense of American retirees.

"Americans who work today and save for tomorrow need to optimize their returns to afford life in retirement," Capito said. "Political agendas like Joe Biden's 'woke' ESG requirements pressures financial experts to shift potential gains away from American retirees and into Joe Biden and the Department of Labor's political projects. These efforts harm Americans saving for retirement by pressuring investing specialists to use Americans' life savings to fund the radical agenda in the White House."

In November 2022, Biden instituted a rule that explicitly permits ERISA retirement plan fiduciaries to consider environmental, social, and corporate governance factors when selecting investments and exercising shareholder rights, Manchin and Capito said in the joint statement. This rule replaces a previous rule which mandated fiduciary decisions be made solely on getting the best returns for the 152 million American workers that depend upon ERISA for their retirement. Under the administration's rule, retirement fund managers can prioritize ESG factors instead of financial returns in their investment decisions for workers' savings, the two lawmakers said.

U.S. Rep. Andy Barr, R-Ky., is leading the House version of the legislation. The resolution of disapproval has been endorsed by more than 100 groups.

Efforts to fight ESG mandates also are underway on the state level.

West Virginia Attorney General Patrick Morrisey recently joined a coalition of 25 states, including Virginia, in challenging the plan, which Morrisey said pushes "a woke, left-wing agenda that inappropriately promotes environmental, social and governance (ESG) initiative, irrationally contradicts the 2020 Investment Rule and offends the Employee Retirement Income Security Act."

By allowing employers and investment managers to consider environmental and social factors, Morrisey said the rule turns what should be a financial decision into a political one.

"The Biden administration will stop at nothing to further their woke climate agenda and so-called diversity measures at the expense of pension holders' bottom line — and in likely violation of pension fund managers' fiduciary duties," Morrisey said in an earlier statement last month. "We will vigorously fight this and all regulatory overreach as this administration tries to establish rules to advance their woke agenda."

— Contact Charles Owens at cowens@bdtonline.com

— Contact Charles Owens at cowens@bdtonline.com. Follow him @BDTOwens