U.S. Senator Ted Cruz has introduced the Stop TSP ESG Act, a new bill seeking to prohibit asset managers overseeing the federal Thrift Savings Plan (TSP) from exercising any proxy voting rights on behalf of federal employees, effectively blocking the use of ESG or DEI considerations in the plan’s governance [1][2]. The TSP, which recently surpassed $1 trillion in assets, is managed primarily by BlackRock and State Street, two firms that have become frequent targets in Republican-led anti-ESG campaigns [1].

A direct response to perceived ESG influence

In announcing the bill, Cruz accused asset managers of using federal workers’ savings to “push ESG and DEI agendas that conflict with their investors’ interests” [1][2]. His office specifically alleged that BlackRock and State Street have leveraged TSP holdings to influence corporate proxy voting in support of ESG-related resolutions, a claim central to broader attacks on sustainable investing by U.S. conservatives [1].

The legislation, however, goes further than curbing specific ESG votes. The text would ban asset managers from casting any proxy votes at all on behalf of TSP participants, regardless of subject matter, marking one of the most sweeping federal proposals to restrict ESG-related investment activity to date [1].

Part of a broader legal and political backlash

The bill arrives amid an intensifying national effort to constrain ESG across capital markets. BlackRock, State Street, and Vanguard are currently defendants in a multistate lawsuit alleging antitrust violations tied to their climate and sustainability initiatives [1]. Under political pressure, both BlackRock and State Street have already withdrawn from the Net Zero Asset Managers (NZAM) initiative for their U.S. businesses and reduced support for climate-linked shareholder resolutions [1].

Cruz framed the Stop TSP ESG Act as a corrective measure: “Americans deserve assurance that their retirement savings are being invested in the most fiscally responsible ways… The Act would end that practice and restore accountability” [1][2].

Implications for federal retirement governance

If passed, the bill would reshape how proxy rights are exercised within the TSP, disrupting a longstanding system in which asset managers vote on issues ranging from board appointments to executive compensation and shareholder proposals. It could also prompt broader questions about fiduciary responsibility, corporate governance efficiency, and the growing political polarisation around investment stewardship.

For asset managers already facing investigations, lawsuits, and political scrutiny, the bill signals that federal-level ESG restrictions are accelerating, not receding.

Références

[1] ESG Today – Ted Cruz Targets BlackRock, State Street With New Bill to Block ESG Voting in $1 Trillion Federal Retirement Plan
https://www.esgtoday.com/ted-cruz-targets-blackrock-state-street-with-new-bill-to-block-esg-voting-in-1-trillion-federal-retirement-plan/

[2] ESG Post – U.S. Senator Ted Cruz moves to curb ESG influence in federal retirement funds
https://esgpost.com/u-s-senator-ted-cruz-moves-to-curb-esg-influence-in-federal-retirement-funds/