The U.S. Department of Labor (DoL) has publicly condemned the Organization for Economic Co-operation and Development, or OECD, for “pushing members to politicize their pension systems” with ESG (Environmental, Social, and Governance) factors. The strong rebuke was delivered by Justin Danhof, Senior Policy Advisor for the Employee Benefits Security Administration (EBSA), at an OECD pension conference in Paris. The statements signal a major shift in U.S. policy under the Trump administration.
A “Marxist” Critique of ESG:
In his speech, Danhof stated that the U.S. will no longer support policies that integrate ESG factors into retirement investments. He characterized ESG as a core threat to capitalism and a tool that benefits authoritarian regimes.
“ESG, at its core, looks a lot like a Marxist march through corporate culture. What is the point of Marxism? The complete destruction of capitalism,” Danhof said. He added, “If America and other OECD member companies hamstring our nations’ capital markets and pension systems with superfluous ESG costs, it only serves to benefit authoritarian regimes that do not engage in such frivolity.”
Danhof’s remarks are aligned with the Trump administration’s broader effort to roll back a previous rule that allowed pension funds to consider ESG factors. He stated that the new rules, expected by May 2026, will require pension plans to invest “based only on financial considerations relevant to the risk-adjusted economic value of a particular investment, and not to advance social causes.”
Broader U.S. stance on corporate regulation:
It must be noted that the critique of international ESG standards extended to the Securities and Exchange Commission (SEC), with Chair Paul Atkins also voicing concerns at the same conference. Atkins described the European Union’s sustainability reporting requirements as “prescriptive” and a “burden” to U.S. companies.
“As Europe seeks to promote its capital markets…it should focus on reducing unnecessary reporting burdens on issuers rather than pursuing ends that are unrelated to the economic success of companies and to the well-being of their shareholders,” Atkins said.
