Manchin joins Republicans in bid to undo Biden ESG rule
“ Republicans want to strike down a new Department of Labor rule on climate-minded investing. The West Virginia Democrat is on board.”
Manchin joins Republicans in bid to undo Biden ESG rule
Republicans want to strike down a new Department of Labor rule on climate-minded investing. The West Virginia Democrat is on board.
BY: EMMA DUMAIN | 01/31/2023 06:36 AM EST
Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) at the Capitol. Manuel Balce Ceneta/AP Photo
CLIMATEWIRE | West Virginia Democratic Sen. Joe Manchin will vote for a GOP-led effort to overturn a Biden administration rule on climate-minded investing decisions, his office confirmed Monday.
It will be the GOP’s first high-profile challenge of the new Congress to so-called ESG investing, which screens investments for environment, social and governance risks. Republicans deride it as “woke capitalism.”
Manchin's spokesperson, Sam Runyon, said in a text to E&E News that the Energy and Natural Resources chair would join with Republicans to overturn the rule.
The effort could prove successful: With Manchin’s endorsement, and assuming all 49 Republicans vote “yes,” Republicans need just one more Democrat to defect for the resolution to be adopted under the Congressional Review Act. The CRA allows Congress to overturn recently finalized rules via simple majority in both chambers.
Sen. Mike Braun (R-Ind.) told E&E News that he was “working on” identifying a "a couple" additional Democrats to support his resolution, which would overturn the Department of Labor’s rulemaking allowing fiduciaries to take ESG factors into consideration when choosing retirement investments.
The resolution is expected to be introduced in the coming days.
If the Senate is able to advance the resolution, the House could also take it up, where it would be overwhelmingly endorsed by the Republican majority. President Joe Biden would likely issue a veto.
It would be a major win for the GOP as it seeks to leverage the newly Republican-controlled House to extract some policy victories in divided government.
It would also send a message to the far-right that the party is paying attention to demands from the conservative base to crack down on ESG investing, which critics say is steering business away from the oil and gas industry.
House Republicans are contending with such a dynamic as Rep. Patrick McHenry (R-N.C.), a mainstream congressman closely aligned with leadership, takes the helm of the House Financial Services Committee and has signaled he isn’t interested in making ESG oversight a top priority at the full committee level (Climatewire, Jan. 27).
McHenry could come under increasing pressure to become more aggressive in this arena. Meanwhile, Rep. Andy Barr (R-Ky.), the new chair of the Financial Services Subcommittee on Financial Institutions and Monetary Policy, who has long championed anti-ESG legislation, will introduce the companion CRA resolution to Braun’s.
Back in the Senate, it’s not clear who else could vote on the CRA resolution to clear it for House action.
Braun wouldn’t say who he was courting, but he is likely reaching out to other moderate senators who are, like Manchin, up for reelection in 2024 and could see advantage in joining such a Republican effort or who hail from a state that relies on fossil fuel production.
Those Democrats could include Sen. Jon Tester. The Montana Democrat late last year sent a letter to Gary Gensler, chair of the Securities and Exchange Commission, to express concern about how farmers in his state's agriculture economy would be affected by a proposed rule requiring companies to provide details about their physical risks from climate change and disclose their supply chain emissions.
Tester’s spokesperson, Sarah Feldman, said the senator was waiting to review legislative text before making a decision.
Reporter Nico Portuondo contributed.
This story also appears in E&E Daily.