2021: Schweikert Voted Against Requiring The Securities And Exchange Commission To Establish New Disclosure Requirements For Publicly Traded Companies, Which Would Require The Companies To Disclose And Define Their Environmental, Social, And Governance Metrics, Including Climate Risks, Political Expenditures, Executive Pay, And Tax Information. In June 2021, Schweikert voted against the Corporate Governance Improvement and Investor Protection Act which would, according to Congressional Quarterly, "establish new disclosure requirements for publicly traded companies related to environmental, social, and governance (ESG) metrics; climate-related risks; political expenditures; executive pay; and tax information regarding overseas subsidiaries. It would direct the Securities and Exchange Commission to require publicly traded companies to disclose and define their ESG metrics as part of any filing that requires audited financial statements; require companies to disclose in any proxy or consent solicitation material for annual shareholder meetings a clear description of the link between ESG metrics and the company's long-term business strategy and processes used to determine the impact of such metrics on the business strategy; and require the SEC to establish a sustainable finance advisory committee to identify investment challenges and opportunities associated with sustainable finance and recommend policies to facilitate sustainable investments. It would require publicly traded companies to include in annual reports to the SEC information related to risks posed to the company by climate change, including a description of actions taken to identify and mitigate such risks and an evaluation of potential financial impacts of risk-management strategies. It would direct the SEC to establish rules within two years of enactment to standardize climate-related risk disclosures, including industry-specific reporting standards, standards for estimating and disclosing greenhouse gas emissions, and standards for disclosing fossil fuel-related assets. It would direct the SEC to require companies that issue securities to disclose certain political expenditures quarterly to the commission and shareholders -- including the date and amount of each expenditure and whether it was made in support of or opposition to a political candidate -- and to include in annual shareholder reports a summary of each political expenditure greater than $10,000 in the preceding year and planned political expenditures for the forthcoming year. It would require publicly traded companies to include in annual reports to the SEC information regarding pay raises for executive and non-executive employees, including the percentage increase in the median compensation for each group, and the ratio of the two numbers. It would require publicly traded multinational companies to disclose annual financial and tax information for overseas subsidiaries in each tax jurisdiction in which they operate, including the income taxes paid, profits or losses before income tax, assets, revenues generated from transactions with other internal entities, and number of full-time employees in each jurisdiction." The vote was on passage. The House passed the bill by a vote of 215-214. The Senate did not take substantive action on the bill. [House Vote 169, 6/16/21; Congressional Quarterly, 6/16/21; Congressional Actions, H.R. 1187]
Under H.R. 1187, Publicly Trade Companies Would Have To Disclose Their Views On The Relation Between Environmental, Social, And Governance Metrics And "Long-Term Performance." According to Congressional Quarterly, "Companies would also have to disclose in proxy statements their views on the link between ESG metrics and long-term performance under the bill." [Congressional Quarterly, 2/23/21]
H.R. 1187 Would Assign The Securities And Exchange Commission To Define Sustainability Metrics That Would Need To Be Disclosed With The Deliberation From A Newly-Established Sustainable Finance Advisory Committee. According to Congressional Quarterly, "The bill would leave it to the SEC to hammer out which sustainability metrics companies would be required to disclose, though the measure would also mandate the establishment of a Sustainable Finance Advisory Committee at the agency to weigh in on the deliberations." [Congressional Quarterly, 2/23/21]
According To Rep. Juan C. Vargas, Author Of H.R. 1187, The Measure Would Be Critical In Retrieving Information About Companies' Ethical And Sustainable Decisions That Would Help When Deciding Whether To Invest In Certain Companies. According to Congressional Quarterly, "Rep. Juan C. Vargas introduced a bill that would require public companies to disclose environmental, social and governance metrics in their filings with the Securities and Exchange Commission [...] 'We have seen how a company's approach to the climate crisis, diversity among its leadership, and its receptiveness to social change have affected its business in the past, as well as its impact on the public's well-being,' Vargas said. 'This information is essential when deciding whether or not to invest in a company or how to vote on the company's direction."' [Congressional Quarterly, 2/23/21]
2023: Schweikert Voted To Override President Biden's Veto On A Joint Resolution That Would Overturn A Labor Department Rule That Would Allow Retirement Plan Fiduciaries To Consider Environmental, Social And Governance (ESG) Factors In Making Investment Decisions And Exercising Shareholder Rights. In March 2023, according to Congressional Quarterly, Schweikert voted to override President Biden's veto on a resolution that would "provide for congressional disapproval of the December 2022 Labor Department rule modifying standards under the Employee Retirement Income Security Act to allow retirement plan fiduciaries to consider environmental, social and governance factors in making investment decisions and exercising shareholder rights, including when voting on shareholder resolutions and board nominations. The December rule took effect on Jan. 30, 2023, and reversed a Trump-era rule stating that fiduciaries may only select investments based on 'pecuniary factors.' Under the joint resolution, the December rule would have no force or effect." The vote was on a veto override. The House failed to acquire a 2/3 majority vote and rejected the veto override by a vote of 219 to 200, thus President Biden's veto was sustained and the rule remained in place. [House Vote 149, 3/23/23; Congressional Quarterly, 3/23/23; Congressional Actions, H.J.Res. 30]
President Biden's Veto Message Argued That Blocking The ESF Fiduciary Rule Would Prevent Retirement Managers From Considering Factors That May Be Relevant To Investors. According to Congressional Quarterly, "In his veto message released Monday, the president argued that blocking the rule through the Congressional Review Act would prevent managers from considering an assortment of factors that may be relevant to investors." [Congressional Quarterly, 3/23/23]
President Biden Argued That The Resolution Would Force Retirement Managers To Ignore Risk Factors, Disregarding Free Market Principles And Jeopardizing Retirement Savings. According to Congressional Quarterly, "'There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses. But the Republican-led bill would force retirement managers to ignore these relevant risk factors, disregarding the principles of free markets and jeopardizing the life savings of working families and retirees,' Biden said. 'In fact, this bill would prevent plan fiduciaries from taking into account factors like the physical risks of climate change and poor corporate governance, that could affect investment returns.'" [Congressional Quarterly, 3/23/23]
2023: Schweikert Voted To Disapprove A Labor Department Rule That Would Allow Retirement Plan Fiduciaries To Consider Environmental, Social And Governance (ESG) Factors In Making Investment Decisions And Exercising Shareholder Rights. In February 2023, according to Congressional Quarterly, Schweikert voted for a resolution that would "provide for congressional disapproval of the December 2022 Labor Department rule modifying standards under the Employee Retirement Income Security Act to allow retirement plan fiduciaries to consider environmental, social and governance factors in making investment decisions and exercising shareholder rights, including when voting on shareholder resolutions and board nominations. The December rule took effect on Jan. 30, 2023, and reversed a Trump-era rule stating that fiduciaries may only select investments based on 'pecuniary factors.' Under the joint resolution, the December rule would have no force or effect." The vote was on passage. The House passed the resolution by a vote of 216 to 204, thus the resolution was sent to the Senate. The Senate passed the resolution and sent it to President Biden. President Biden vetoed the resolution. [House Vote 124, 2/28/23; Congressional Quarterly, 2/28/23; Congressional Actions, H.J.Res. 30]
Republicans Opposed Against ESG Factors In Investments And Advocate For Making Investments Based Solely On Whether They Enhance Their Retirement Savings. According to Congressional Quarterly, "The House voted Tuesday to pass a resolution disapproving of a Labor Department rule that allows retirement plans to consider environmental, social and governance factors in their investment decisions. The 216-204 vote, ahead of a similar one expected in the Senate, takes aim at a rule that has become a rallying cry for Republicans, who say those responsible for retirement funds should make investment decisions based solely on whether they enhance retirement savings." [Congressional Quarterly, 2/28/23]
The House Education And The Workforce Committee Claimed That The Labor Rule Enabled Retirement Fiduciaries To Consider ESG Factors And Allow Activist Investors To Invest In Left-Wing Causes And Argued That ESG Funds Were Underperformers And High-Risk Investments. According to Congressional Quarterly, "The House Education and the Workforce Committee also circulated statements Tuesday from a range of groups opposed to the rule. 'The Biden administration is putting the retirement security of millions of Americans at risk,' the committee said in an email. 'The Biden administration's new rule --- which enables and encourages retirement fiduciaries to consider environmental, social, and governance (ESG) factors --- will allow activist investors to funnel retirees' savings into progressive, left-wing causes. Moreover, ESG funds are notorious underperformers and relatively high-risk, leaving the futures of retirees less secure.'" [Congressional Quarterly, 2/28/23]
The Labor Rule Reversed A Trump Administration Rule And Sought To Appease Financial Firms That Wanted Clearer Regulations And Plan Sponsors That Did Not Want An ESG Factor Mandate. According to Congressional Quarterly, "The Labor Department sought to strike a compromise with the rule, balancing between financial services firms that wanted clear rules and plan sponsors that didn't want to be required to consider ESG factors. The rule would reverse Trump administration changes to the implementation of 1974 legislation known as the Employee Retirement Income Security Act (PL 93-406), a law that governs a broad range of retirement and health benefit plans." [Congressional Quarterly, 2/28/23]
The Trump Admonition Rule Only Allowed Investments Based On Pecuniary Factors, So The Biden Administration Clarified That ESG Factors Could Be Used In A Risk-And-Return Analysis For Investment Decisions If Plan Sponsors Reasonably Determined That Such Impacts Would Be Relevant. According to Congressional Quarterly, "The Biden administration, investors and other ESG proponents had said the Trump administration changes created a 'chilling effect' on sustainable investments' inclusion in retirement plans. The department unveiled its proposal in October 2021 to open ESG-focused retirement plans to more Americans. The rule got rid of language that said plan fiduciaries may only select investments based on 'pecuniary,' or purely financial, factors. It also clarified that the economic effects of ESG factors can be used in a risk-and-return analysis for investment decisions if plan sponsors 'reasonably' determine that those impacts are relevant." [Congressional Quarterly, 2/28/23]
A Group Of GOP Attorneys General Sued The Labor Department In January 2023, Arguing That The Labor Rule Hindered Protections For Retirement Savings And Overstepped Statutory Authority. According to Congressional Quarterly, "At least 25 Republican attorneys general sued Walsh and the Labor Department over the rule in January. Their complaint argued that the rule undermines key protections for retirement savings and oversteps the department's statutory authority under the 1974 law. The lawsuit asked the court to toss the rule, calling it 'arbitrary and capricious' and a violation of both ERISA and the Administrative Procedure Act." [Congressional Quarterly, 2/28/23]
The Labor Department Rule Allowed Retirement Plans To Take In Consideration Climate Factors In Their Investment Decisions. According to Congressional Quarterly, "The Senate on Wednesday cleared a resolution that would disapprove of a Labor Department rule allowing retirement plans to consider climate factors in their investment decisions, setting the stage for the first veto of President Joe Biden's presidency." [Congressional Quarterly, 3/1/23]
2024: Schweikert Voted To Prohibit Environmental, Social, And Governance Investments In Retirement Plans. In September 2024, Schweikert voted for , according to Congressional Quarterly, "the bill, as amended, that would reduce the influence of environmental, social and governance initiatives in corporate retirement plans and their investments. The bill would require fiduciaries to select a retirement plan and the investments of the plan based only on financial factors and not ESG considerations. It would allow fiduciaries to choose an investment with an ESG element in cases where they cannot distinguish among alternative investment plans based on pecuniary factors alone. It would require participants of plans who seek ESG investments that are not part of a plan's original investments to be notified by the fiduciary of possible investment shortcomings. It also would give fiduciaries greater responsibilities in proxy voting when dealing with investments held by the plans to limit the influence of proxy advisory firms and reduce their ability to advance ESG initiatives in shareholder meetings." The vote was on passage. The House passed the bill by a vote of 217 to 206. [House Vote 427, 9/18/24; Congressional Quarterly, 9/18/24; Congressional Actions, H.R. 5339]
2024: Schweikert Voted To Limit Shareholder Proposals Regarding Environmental, Social, And Governance Factors. In September 2024, Schweikert voted for , according to Congressional Quarterly, "passage of the bill, as amended, that would place restrictions on shareholder proposals and proxies to stem environmental, social and governance (ESG) considerations. The bill would overturn a current Securities and Exchange Commission rule that outlines when shareholders' proposals must be included in a proxy statement in the company's annual meeting. The bill also would prohibit the SEC from finalizing a rule that would narrow the exclusion criteria for shareholder proposals. The legislation also would allow companies to exclude proposals that they have already implemented, and require proxy advisory firms to register with the SEC and set standards for their services. These proxy advisory firms also would be required to produce economic analyses for social and political issues and would place restrictions on proxy voting. It also would create the Public Company Advisory Committee. It will advise the SEC on its rules, regulations, and policies on how to best protect investors and maintain fair and orderly markets. It also would limit the agency's ability to require public companies to disclose 'non-material' information." The vote was on passage. The House passed the bill by a vote of 215 to 203. [House Vote 435, 9/19/24; Congressional Quarterly, 9/19/24; Congressional Actions, H.R. 4790]