Thirteen Democratic senators submitted a letter Wednesday to Labor Secretary Eugene Scalia in which they voiced opposition to a proposed rule they say would “discourage investments which consider environmental, social, and governmental (ESG) criteria.”
Spearheaded by Sen. Patty Murray, D-Wash., ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee and Tina Smith, D-Minn., it argued ESG investing can be important in considering a company’s performance like diversity and “how it can serve as a tool for long-term change in the fight against problems like racial and economic inequality.”
“We are at a pivotal moment in the fight against systemic racism in our country,” the letter reads. “Yet, while people across the country demand accountability and reach for available tools to fight for racial and economic equity—from advocating for sweeping federal reforms to address systemic racism to taking smaller personal steps like supporting Black-owned businesses—the Department is moving in the opposite direction.”
ESG investing allows retirement savers to support long-term change by building a system “that rewards and values inclusion and diversity in corporate culture from the board to the workforce,” it continues. “By restricting ESG investing, the Department’s proposal would undermine a powerful tool that leverages trillions of dollars a year to drive positive social change.”
ESG size
They reference the Forum for Sustainable and Responsible Investment in noting that in 2018, there were $12 trillion invested in ESG funds—more than a quarter of total investments—and rapid growth in the strategy is expected in the future.
The letter was also signed by Senators Sherrod Brown (D-OH), Kirsten Gillibrand (D-NY), Tim Kaine (D-Va), Elizabeth Warren (D-Mass), Bernie Sanders (I-Vt), Tammy Baldwin (D-Wisc.), Bob Casey (D-Penn), Dick Durbin (D-Ill.), Amy Klobuchar (D-Minn.), Cory Booker (D-NJ) and Dianne Feinstein (D-Calif).
SEE THE FULL TEXT OF THE LETTER HERE