If people want to involve social justice while deciding on their investments, that is their choice, but everyone should not be compelled to base their financial decision on environmental, social, and corporate governance (ESG) factors, Sen. James Lankford said on Newsmax Wednesday.
"That's how capitalism is," the Oklahoma Republican told Newsmax's "Wake Up America." "You can invest in whatever you want to. It's driven by the market, but [ESG] is not driven by the market. This is the political preference of the left, saying they want to compel everyone to be involved."
However, the Biden administration, along with activists are trying to tell companies that they cannot take just fiduciary responsibility into account to ensure their clients are making money, said Lankford.
Instead, companies are told they can take on the responsibility that clients are socially liberal or that they're working on environmental issues and that is how their money will be invested, he added.
"The biggest challenge with ESG is no one knows what it means," Lankford said. "It means whatever the activist wants it to mean so they can step in one day and say This is what it means to be environmental, and they can step in the next day and say, Well, it means something more now to be environmental."
Such activists also put pressure on corporate clients and the corporations will cave in, he continued, and rather than investing in what will get their greatest concern for clients, "they're really investing to get the greatest return for the environment. They're investing based on the political preferences of the Biden administration."
Lankford said he's met with leaders from BlackRock and told them their first fiduciary responsibility is to their clients, and also commented Wednesday that other companies like Vanguard have walked away from ESG investing, saying that they must ensure that their clients are getting a good return on their money.
The House voted 216-204 to block a Biden administration rule to allow ESG factors to come under consideration by retirement plan fiduciaries, and Lankford said he also thinks the measure will win in the Senate.
The question then for President Joe Biden will be whether to add more to the nation's debt and reduce Americans' retirement funds or if he will focus on trying to protect Americans to be able to invest in what they want to invest in and to be able to make that choice, said Lankford.
This is a simple way to say Americans can spend their money as they choose to," he said. "They can invest as they choose to, but do not mess with people's retirement, which is what the Biden administration is trying to do right now."
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Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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