,i #aagth ,,congress #ast ,session ,h4 ,r4 #cfjd ,,in ,,the ,,house ,,of ,,representatives ,may #bh1 #bjba ,mr4 ,levin of ,michigan 7for himself1 ,mrs4 ,axne1 ,mr4 ,brendan ,f4 ,boyle of ,pennsylvania1 and ,mr4 ,garca of ,illinois7 introduced the following bill2 which was referred to the ,committee on ,education and ,labor ,a ,,bill ,to amend the ,employee ,retirement ,income ,security ,act of #aigd to enable consideration and disclosure by retirement plans of ,sustainable ,investment ,policies4 #a4 ,short title ,this ,act may be cited as the ,retirees ,sustainable ,investment ,opportunities ,act of #bjba4 #b4 ,findings ,the ,congress finds the following3 7#a7 ,there is now incontrovertible evidence that environmental1 social1 and governance 7hereinafter in this ,act referred to as ,,esg7 factors can have material and substantial effects on investment performance4 7#b7 ,the ,united ,states ,department of ,labor which is responsible for administering and enforcing the ,employee ,retirement ,security ,act of #aigd has historically recognized that retirement plans may make economically targeted investments 7,e,t,is71 that is1 investments that offer the potential for economic benefits1 such as local job creation1 community economic development1 and affordable and workforce housing construction1 in addition to investment returns1 provided such investments otherwise comply with ,,erisa's fiduciary requirements4 7#c7 ,,esg and ,,eti-related factors are referred to in this ,act as sustainability considerations and investments guided by sustainability considerations are referred to as sustainable investments4 ,sustainable investments have the potential to contribute to the long-term well-being and resilience of individuals and communities in this nation and around the world while earning investment returns comparable to or better than investments with similar risk that do not take these factors into account4 7#d7 ,sustainable investing is now among the fastest growing segments of the investment industry with broad and growing interest from both individual investors and institutional asset managers4 ,nevertheless1 sustainable investments are virtually absent from ,,erisa-regulated retirement plans in the ,united ,states4 7#e7 ,retirement plans and participants in individual account retirement plans should have the opportunity to make and hold sustainable investments1 provided ,,erisa's fiduciary requirements are otherwise met4 7#f7 ,accordingly1 fiduciaries for retirement plans should-- 7,a7 incorporate all relevant factors1 including sustainability-related factors1 into investment analysis and decision-making processes1 consistent with the investment time horizons of plan participants and beneficiaries2 7,b7 be permitted to consider factors relevant to sustainability1 whether or not they can be demonstrated to be financially material1 provided doing so does not diminish anticipated investment returns or increase investment risk and is otherwise consistent with ,,erisa's fiduciary requirements2 7,c7 encourage the adoption of best practices for sustainability performance and sustainability impacts in the companies or other entities in which they invest2 7,d7 consider plan participants' and beneficiaries' sustainability-related interests and preferences when making investment decisions2 7,e7 consider the impact of plan investments on the stability and resilience of the financial system and on broad market returns as a result of the sustainability characteristics of those investments2 7,f7 consider participation in shareholder engagement and proxy activities1 policy advocacy and similar actions based on sustainability considerations2 and 7,g7 disclose how they have implemented these commitments4 #c4 ,purpose ,the purpose of this ,act is to enable retirement and welfare benefit plans and participants in individual account retirement plans that are covered by the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajja et seq471 to make and hold sustainable investments1 consistent with the fiduciary standards1 requirements1 and procedures of said ,employee ,retirement ,income ,security ,act4 #d4 ,amendments to the ,employee ,retirement ,income ,security ,act of #aigd 7a7 ,disclosure of sustainable investment policies ,section #ajb of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajbb7 7,,erisa7 is amended in subsection 7b71 by inserting a statement of whether or not the plan has adopted a sustainable investment policy pursuant to section #djb7;b77#e7 of ,,erisa2 after collective bargaining agreement24 7b7 ,establishment of sustainable investment policy ,section #djb of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajb7 is amended-- 7#a7 in subsection 7b7-- 7,a7 in paragraph 7#c71 by striking and2 7,b7 in paragraph 7#d71 by striking the period and insert 1 and2 and 7,c7 by inserting after paragraph 7#d7 the following3 7#e7 adopt a sustainable investment policy of the plan in accordance with subparagraph 7d71 provided a plan may elect not do so if it gives notice to plan participants or beneficiaries in writing of such election 2 and 7#b7 by adding after subsection 7c7 the following3 7d7 7#a7 ,a sustainable investment policy under subsection 7b77#e7 shall address sustainability considerations including1 without limitation1 the following3 7,a7 ,economically targeted investment considerations including1 the potential for achieving economic benefits1 such as local job creation1 community economic development1 and affordable and workforce housing construction1 in addition to investment returns4 7,b7 ,social considerations including-- 7i7 characteristics of workforces employed by entities in which the plan invests1 including compensation and benefits1 health and safety1 diversity and demographics1 skills and training1 retention and turnover1 full-time and part-time employment1 and the use of independent contractors2 7ii7 labor and human rights compliance by entities in which the plan invests1 including workers' freedom of association1 the right to collectively bargain1 and the prevention of employment discrimination1 child labor1 and forced labor in company operations and supply chains2 7iii7 due diligence and practices regarding supply chain management1 including environmental1 human rights1 and worker compensation considerations2 and 7iv7 the implementation1 to the extent practicable1 of practices which enhance diversity and inclusion within the workforce1 senior leadership1 business procurement1 and philanthropy4 7,c7 ,environmental considerations including-- 7i7 the potential to reduce and ultimately eliminate net greenhouse gas emissions associated with business activities and to mitigate exposure to climate-related risks to the businesses1 assets and properties of entities invested in by the plan2 7ii7 the potential to mitigate other climate-related and associated environmental harms and risks1 such as industrial pollution1 habitat destruction1 deforestation1 species endangerment and extinction1 and other forms of environmental degradation2 7iii7 the potential to address and rectify issues of environmental justice and the inequitable environmental impacts of certain business operations on historically disadvantaged communities2 and 7iv7 the potential to provide workers affected by the shift to a low carbon economy with a just transition by creating decent work and quality jobs4 7,d7 ,governance considerations including-- 7i7 corporate governance practices by entities in which the plan invests1 including executive compensation1 board diversity1 worker board representation and codetermination1 the independence of board chairs1 political spending and lobbying disclosure2 and 7ii7 tax practices of entities in which the plan invests1 including international tax avoidance strategies and tax payment disclosure4 7,e7 ,other relevant economically targeted investment1 environmental1 social1 and governance considerations and factors4 7#b7 ,a plan shall be deemed to have adopted a sustainable investment policy for the purposes of subsection 7b77#e7 if it incorporates the sustainability considerations set forth in subsection 7d77#a7 into a previously adopted investment policy of the plan or if the plan elects to be governed by a sustainable investment policy otherwise meeting the requirements of subsection 7d77#a7 adopted by a third-party fiduciary to the plan4 7#c7 ,a plan that has adopted a sustainable investment policy pursuant to subsection 7b77#e71 including plans relying on subsection 7d77#b71 shall conduct a review of such policy on an annual basis4 4 7c7 ,utilization of certain sustainability considerations ,section #djd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7 is amended in subsection #djd7;a7 by adding after subsection 7#b7 the following3 7#c7 ,this subsection #djd7;a7 shall not be construed to prohibit a plan fiduciary from doing the following3 7,a7 ,in choosing among investments with comparable degrees of risk and rates of return1 selecting one or more such investments based on one or more sustainability considerations as set forth in section #djb7;d77#a71 regardless of whether such considerations are determined to be financially material4 ,for the purposes hereof1 the determination that investments have comparable degrees of risk and anticipated rates of return shall be a determination that a prudent man acting in like capacity and familiar with such matters could reasonably be expected to make on a forward-looking basis4 7,b7 ,incorporating sustainability considerations into the monitoring of or decisions regarding the disposition of plan investments4 7,c7 ,exercising proxy voting rights in accordance with the plan's proxy voting guidelines which may include sustainability considerations4 7,d7 ,considering as financially material to retirement benefits the potential for increased contributions to the plan resulting from a plan investment4 4 7d7 ,individual account plans ,section #djd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7 is amended in subsection #djd7;c77#a7 by adding after subsection 7,c7 the following3 7,d7 ,in selecting investment alternatives for individual accounts1 including investment alternatives meeting the requirements of section #djd7;c77#e7 of this title1 a plan fiduciary may include investment alternatives selected in part on the basis of sustainability considerations as set forth in section #djb7;d77#a7 regardless of whether such considerations are determined to be financially material1 provided any such alternative is determined to have a degree of risk and anticipated rate of return comparable to other investments of similar type determined by the fiduciary to be available and appropriate for inclusion in the plan4 ,for the purposes hereof1 the determination that investments have comparable degrees of risk and rates of return shall be a determination that a prudent man acting in like capacity and familiar with such matters could reasonably be expected to make on a forward-looking basis4 4 7e7 ,establishment of sustainable investment policy technical assistance program ,not later than #ij days after the date of enactment of this ,act1 the ,assistant ,secretary of ,labor for ,employee ,benefits shall establish a technical assistance program to provide educational materials and technical assistance to plans to comply with the amendments made by this ,act4