As backlash ramps up against the Department of Labor’s new rule permitting retirement plan fiduciaries to consider climate change and other environmental, social and governance factors when selecting investments, House Democrats introduced a bill to codify the rule into law.

The Freedom to Invest in a Sustainable Future Act, like the Labor Department’s Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights rule that took effect Jan. 30, stipulates that plans may consider ESG factors in their investment decisions when they are expected to have an impact on investment outcomes, provided plans consider them in a prudent manner consistent with their fiduciary obligations.

While the bill, which was introduced Feb. 23 by Rep. Suzan DelBene, D-Wash., Sean Casten, D-Ill., Rep. Juan Vargas, D-Calif., and Dean Phillips , D- Minn., would allow plan fiduciaries the option to consider ESG factors when making investment decisions, it does not mandate that they do so.

The same bill was introduced in the Senate on Feb. 16.

“Americans deserve a secure retirement, and ESG investments can be a key component in accomplishing that goal,” Ms. DelBene said in a news release. “This bill would help provide workers and retirees a pathway to reach that secure retirement and invest in a sustainable world for future generations. This legislation would provide certainty to workers that these rules will be consistent going forward as they plan their retirement.”

The Labor Department rule has faced steep pushback this year and on Tuesday, the House will vote on a resolution to nullify it under the Congressional Review Act. The CRA lets Congress disapprove — by a simple majority vote — a final rule issued by a federal agency if it has not been in effect for more than 60 legislative days.

With Republicans in control of the House and united in their opposition to the rule, the resolution will likely pass.

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