House Republicans have passed two anti-ESG bills aimed at limiting the use of environmental, social, and governance (ESG) factors in investment decisions. The first bill, H.R. 5339, restricts pension fund managers from considering ESG factors, while the second bill, H.R. 4790, curtails the Securities and Exchange Commission’s (SEC) authority to mandate ESG-related disclosures. Both bills were passed with narrow margins, but they are unlikely to advance in the Democrat-controlled Senate. 

H.R. 5339, known as the Protecting Americans’ Investments from Woke Policies Act, mandates that pension fund managers only use non-pecuniary factors like ESG when they cannot distinguish between investments on financial grounds. The bill has faced criticism from the Office of Management and Budget (OMB), which argues that it could undermine the Employee Retirement Income Security Act (ERISA). 

Meanwhile, H.R. 4790, also called the GUARDRAIL Act, limits the SEC’s ability to require disclosures on issues deemed immaterial by the company itself. The bill seeks to counter what Republicans see as overreach by liberal activists and regulators. 

Critics of the bills, including sustainable investment experts, warn that these measures could harm investors by restricting crucial disclosures related to issues like climate risks and supply chain ethics. 

Despite their passage in the House, both bills are expected to stall in the Senate. 

Sources: 

https://www.esgdive.com/news/house-passes-pair-of-anti-esg-bills-target-woke-policies/727674/ 

https://www.investmentnews.com/regulation-and-legislation/gop-woke-week-advances-package-of-anti-esg-bills/257269 

https://www.bondbuyer.com/news/republican-anti-woke-week-produces-anti-esg-investing-and-disclosure-package 

https://gazette.com/news/wex/house-passes-anti-esg-legislation-as-gop-targets-woke-policies/article_90c6e0e8-04a6-54aa-a278-5ce4e22669ac.html