- The Washington Times - Tuesday, September 17, 2024

The White House on Tuesday pushed back against a House Republican proposal that would limit woke investment strategies by restricting the government’s ability to require companies to disclose information on social issues unrelated to their finances.

The White House’s Office of Management and Budget said the bill would hamper the Securities and Exchange Commission’s ability to do its job by leaving it up to corporations to decide what they want to disclose. 

In a statement, the White House said the bill would weaken investor protection because it would prevent the SEC from sharing information about shareholder proposals.

“The SEC also exists to ensure that companies are responsive to shareholder and investor concerns. However, [the bill] would disempower stakeholders and investors by preventing the SEC from compelling companies to notify investors of other shareholders’ proposals and by limiting the types of proposals shareholders can introduce,” the OMB said. 

Under the bill, which is in the House Financial Services Committee, companies and trusts would need to reveal only financial information affecting shareholder voting or investment. Companies would not have to disclose non-financial data such as board demographics and environmental records. 

The bill takes aim at environmental, social and governance factors that some retirement plan administrators and asset managers consider when selecting an individual’s 401(k) investment plan. With ESG, administrators give as much weight to a fund’s support of liberal causes, such as donations to Black Lives Matter or building wind turbines, as they do financial returns. 

Republicans have had ESG investing in their sights for a long time, arguing that it’s nothing more than an excuse to funnel Americans’ hard-earned income into woke causes. They’ve labeled their bill the Prioritizing Economic Growth over Woke Policies Act. 

The Biden administration has championed ESG investing, arguing it gives workers the freedom to support social causes and financially benefit at the same time.

The White House in 2022 approved a Labor Department rule that would let companies consider factors such as climate change, diversity and even political donations when selecting employees’ 401(K) plans.

• Jeff Mordock can be reached at jmordock@washingtontimes.com.

Copyright © 2024 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

Click to Read More and View Comments

Click to Hide