On Jan. 15, 2026, the Republican-led U.S. House of Representatives passed the Protecting Prudent Investment of Retirement Savings Act (H.R. 2988) by a 213–205 vote, advancing legislation that would limit when fiduciaries may consider environmental, social, and governance (ESG) factors in employer-sponsored retirement plans governed by the Employee Retirement Income Security Act (ERISA).
Rep. Rick Allen (R-Ga.) sponsored the bill and three Democrats — Reps. André Carson (D-Ind.), Henry Cuellar (D-Texas), and Adam Gray (D-Calif.) — joined Republicans in voting for the bill. Carson later said the vote was cast in error.
The legislation would amend ERISA to require fiduciaries to base investment decisions solely on pecuniary factors — defined as factors expected to have a material effect on risk or return — while allowing nonpecuniary considerations only in limited circumstances, such as when fiduciaries are unable to distinguish between otherwise equivalent investment alternatives.
If enacted, the bill would codify into federal statute limits on ESG considerations in retirement investing, reducing the Department of Labor’s discretion to reinterpret fiduciary standards through regulation. That shift would mark a change from recent administrations’ reliance on rulemaking and guidance to shape ESG policy under ERISA.
The vote also reflects continued partisan division over ESG investing, particularly in retirement plans, where policymakers disagree over whether ESG factors represent financially relevant information or nonpecuniary considerations that conflict with fiduciary duties.
Title I of the Employee Retirement Income Security Act (ERISA) governs private-sector retirement plans and requires fiduciaries to act prudently and in the sole interest of participants and beneficiaries. The Department of Labor has long interpreted those duties through regulation, including guidance on whether nonfinancial considerations may factor into investment decisions.
In 2020, the first Trump administration finalized the Financial Factors in Selecting Plan Investments rule, which emphasized that fiduciaries must base decisions on pecuniary factors tied to risk and return and limited the role of ESG considerations. The Biden administration replaced that rule in 2023 with Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, which clarified that ESG factors may be considered when financially relevant and used as a tiebreaker between otherwise equivalent investments.
In May 2025, the second Trump administration announced it would no longer defend the Biden-era rule in federal court. The Department of Labor has since listed a replacement ESG rule on its regulatory agenda, indicating another potential shift in ERISA investment standards.
Ballotpedia tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement. To learn more about arguments for, against, and about ESG, click here. For more information on reform proposals related to ESG policy, click here.