(The Center Square) – Environmental, social and governance policies in investments should be tied to financial risk and return, a federal proposal says.

The Safeguarding Investment Options for Retirement Act would prohibit tax-advantaged retirement plan trustees from considering factors other than financial risk and return when making investment decisions on behalf of workers, retirees and their beneficiaries.

Environmental, social, and governance policies in investments are often referred to by the acronym ESG, though a survey late last year found 78% of Americans are either not familiar with, have never heard of, or are not sure what the corporate term actually means. The poll was conducted by public affairs firm Global Strategy Group and SEC Newgate.

The Ways and Means Committee in the U.S. House of Representatives, of which Rep. Dr. Greg Murphy, R-N.C., is a member, has heard testimony on how using such investment policies can hurt retirees and investors. Murphy sponsored the bill along with Reps. Mike Kelly, R-Pa., Claudia Tenney, R-N.Y., and Beth Van Duyne, R-Texas.

The proposal’s first stop is in the Ways and Means Committee.

“Retirement plans, like 401(k)s, that are tax-advantaged to help individuals save for retirement should be managed to maximize return, not to invest in risky holdings like those propped up by ESG factors,” Murphy said. “Americans’ nest eggs should be built on a solid foundation that confers the greatest growth probability, not investments that are unstable and whitewashed with fake ethical and sustainability scores. Such an endeavor may be noble for those willing to pursue it independently but not managed plans that millions rely on for retirement.”