Congressman Chip Roy (R-TX) introduced last month legislation that would prevent federal employees and retirees from investing their money in the Thrift Savings Plan (TSP) into environmental, social and governance (ESG) investments.
In June, the new TSP mutual fund window allows federal employees access about 5,000 mutual funds. According to the Federal Retirement Thrift Investment Board (FRTIB) — the agency that administers the TSP — the funds will include ESGs.
Specifically, if passed, the No ESG at TSP Act (HR 7896) would prohibit investments under the Thrift Savings Plan in certain mutual funds that make investment decisions based primarily on environmental, social, or governance criteria.
Specific language in the bill is below:
(E) The Board may not offer through the mutual fund window any mutual fund, exchange traded fund (as defined in section 270.6c–11 of title 17, Code of Federal Regulations), or other investment vehicle that invests in bonds or equities that is invested based on any one or more of the following criteria to the extent that such criteria are unrelated to maximizing monetary returns for investors:
(i) Environmental criteria, including—
(I) emissions, climate change, sustainability, environmental justice, pollution, or conservation; or
(II) whether a company is engaged in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy.
(ii) Social criteria, including—
(I) diversity criteria, including—
(aa) the race, ethnicity, gender identity, sexual orientation, or socioeconomic status of the owners, board members, employees, or customers of companies; or
(bb) whether such board members, employees, or customers are members of a labor organization (as such term is defined in section 2 of the National Labor Relations Act (29 U.S.C. 152)); or
(II) whether a company is engaged in the manufacture, transportation, or sale of firearms, firearms accessories, or ammunition.
(iii) Political criteria, including the perceived or actual political affiliations, donations, or associations of companies.
(iv) Criteria for corporate governance standards that differ from the applicable standards required under State and Federal law as in effect on the date of the enactment of this subparagraph.
“ESG investing is a woke scam,” Roy said. “It restricts the free flow of capital, undermines U.S. energy freedom to the benefit of our enemies, and advances woke racial and gender ideologies intent on dividing the republic. The upcoming changes to TSP would allow billions of taxpayer dollars to serve these ends. The federal government shouldn’t have any part in this radical nonsense, and especially shouldn’t be using your money to do it.”
The legislation is cosponsored by Representatives Rob Good (R-VA), Bill Johnson (R-OH), Michael Cloud (R-TX), Louie Gohmert (R-TX), Ted Budd (R-NC), Mary Miller (R-IL), and Bill Posey (R-FL).
Full text of the bill can be found here.
Last week, six U.S. senators sent a letter to the FRTIB requesting the agency cancel the launch of a mutual fund window investment option in the Thrift Savings Plan.
The senators believe the mutual fund window program could expose billions of dollars in retirement savings from participants in TSP to Chinese companies, including ones currently sanctioned or otherwise blacklisted for the threat they pose to U.S. national security.