OPINION:
Before I came to Washington, D.C., I served two terms as the state treasurer of Wyoming. I managed billions of dollars in assets and transitioned the state’s investments from mostly fixed-income funds to a diversified portfolio that grew to more than $8.5 billion. This helped create a buffer to the boom-and-bust cycle of Wyoming’s energy industry. When I invested Wyoming’s funds, I looked at outcomes and returns, not a company’s politics du jour. People across Wyoming do the same. However, there is a small, yet vocal, movement attempting to influence investment rules and pressure investors and financial advisors to make investments based on a company’s environmental, social and corporate governance (ESG) factors.
It astounds me that anyone would make an investment based on political priorities instead of sound financial information and return on investment, but that is where we are today unfortunately. I, however, am not interested in letting the financial well-being of people in Wyoming be hijacked by woke politics.
It is widely known that ESG funds tend to have lower rates of return, yet these massive fund management companies are choosing to put their own politics over the success of retirement portfolios for people across Wyoming. This is unacceptable. It is also unacceptable that the Biden administration is not only allowing this but encouraging it!
At the end of November 2022, the Biden administration released a rule that explicitly allows managers of retirement plans to consider ESG factors when selecting investments and exercising shareholder rights. Prior to this rule, financial advisors and fund managers were required to make decisions solely based on the best interests of their investors.
People in Wyoming want their retirement plans to prioritize the best investments possible. The Biden administration’s attempt to politicize their retirement funds is short-sighted and will result in less money to rely on when they are ready to retire.
I joined Senator Mike Braun (R-IN) along with the rest of my Senate Republican colleagues in introducing a Congressional Review Act (CRA) resolution of disapproval of this rule to signal to President Biden that this rule is harmful to the American people.
SPECIAL COVERAGE: ESG Investments: Prudent or Perilously Political?
In the last Congress, I joined Senator Dan Sullivan (R-AK) to introduce the INDEX Act which would deconsolidate the voting power of these large investment management funds that choose to put politics over investment returns. People across Wyoming have invested their hard-earned dollars in major companies across the U.S., yet their voices are being co-opted by fund managers with a partisan agenda.
Ultimately, these efforts by the Biden administration and woke fund managers are an attempt to quietly subvert the industries they find to be reprehensible our domestic energy industry and the firearms industry are at the top of their list.
Progressive fund managers would prefer traditional energy sources coal, oil and natural gas not exist anymore, and they believe they hold the keys. If they route the assets of unassuming Americans away from these industries, they can try to starve them out. This is unacceptable and short-sighted, and it spells disaster for states like Wyoming that rely on these industries to fund state and local governments. Yet again, the Biden administration is encouraging this! The Securities and Exchange Commission (SEC) has pushed to require businesses to disclose their climate change risk when filling out their required disclosures.
The government should not be picking winners and losers, and it certainly should not be encouraging or pressuring fund managers to pursue a woke agenda instead of positive returns for their customers. It will cause chaos for retirees when they are left with a diminished account due to poor returns on investment.
The purpose of government involvement in Americans’ retirement accounts is to protect them from bad actors, but now it appears that the bad actors are sitting in the regulators’ chairs.
• Senator Cynthia Lummis, Wyoming Republican, is the state’s first female in the United States Senate. She serves on the Commerce, Science, & Transportation Committee; Environment & Public Works Committee; and Banking, Housing, & Urban Development Committee. Prior to the Senate, she served in the U.S. House, as Wyoming State Treasurer, and 14 years in the State House and Senate. Born on a cattle ranch in Laramie County, she has spent her entire career fighting for Wyoming families, communities, businesses, and values.
Please read our comment policy before commenting.