Without adaptation, sea levels will rise and bring more floods sweeping inland, eliminating billions in property value; extreme weather events will occur more frequently worldwide, jeopardizing crop yields and stymieing infrastructure production. 

How should those future retirees be investing today to best weather the vicissitudes of tomorrow? For some on Capitol Hill, the answer is to embrace ESG. For others, the answer is to reject it.

“Disappointing that President Biden is putting E.S.G. and woke policies above hard-working Americans’ retirement accounts!” former vice president Mike Pence wrote on Twitter Tuesday, the day the House voted on a Republican bill designed to block the Labor Department’s relaxation of rules governing private retirement funds.

The Labor Department implemented its softer stance in January via an amendment to a Trump-era rule that had required retirement fund managers to base investment decisions purely on “pecuniary matters.” The Biden-era amendment allows managers to consider other factors “that the fiduciary reasonably determines are relevant” to the risk on return. 

To be clear, ESG metrics have been an integral component of risk analysis for decades, but politicians in Washington have hyped the practice into an existential threat over the past year.

Republicans, and a smattering of Democrats, have framed the Biden amendment as a bid to “garnish the retirement savings of workers without their permission in order to pursue unrelated liberal political goals,” to quote Senate minority leader Mitch McConnell (R-Ky.). 

On the other side of the aisle, Democrats pitch the amendment as a step towards free-market principles, offering retirement planners greater flexibility to choose from products available to them. 

“Nothing in the Labor Department rule imposes a mandate,” Senate majority leader, Chuck Schumer (D-N.Y.), wrote in an op-ed for the Wall Street Journal this week. “It simply states that if fiduciaries wish to consider ESG factors—and if their methods are shown to be prudent—they are free to do so.”

A review of the Labor Department rule by Harvard Law School concurs with Schumer, noting that the Biden amendment “changes nothing” for fiduciaries who were or were not utilizing ESG metrics as part of the risk analysis before. 

With little practical difference between the two rulings, it’s unclear why exactly the Labor Department made the amendment in the first place (if you have any clues, let me know) nor why Republicans are now so opposed.

At the time of writing, the Republican bill to reverse the Labor Department’s rule change has passed the House and looks set to pass a vote in the Senate, too. But, presuming Biden’s rule does allow for greater flexibility, I’d say Republicans are on the wrong end of this one.

Diversity is the best hedge against portfolio risk. Both ESG maximalist and minimalist fund managers know this. Look to Vanguard CEO Tim Buckley’s explanation this week for why the asset manager withdrew from the Net Zero Asset Managers initiative.

Blockading any investment that smells like “woke” capitalism will leave portfolios vulnerable in the long term, as much as dashing to exit any fossil fuel venture now risks losses in the short term. 

So, if you are planning for retirement, make sure you’re still open to change. 

Eamon Barrett
eamon.barrett@fortune.com

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