WASHINGTON (AP) – President Joe Biden on Monday issued the first veto of his presidency as he sought to block a Republican-led effort in Congress to repeal a Labor Department rule that allows pension plans to consider environmental, social and government factors when making investment decisions.
The Labor Department rule ends a Trump-era ban on pension plan managers considering factors such as climate change or pending lawsuits when making investment choices. As the suit and climate change have financial consequences, administration officials argue that their predecessors are facing a disaster.
Critics say that ESG investing is allocating money based on political agendas, such as the push to fight climate change, rather than getting the best results for savers. Republicans in Congress who are pushing for measures to repeal the Labor Department’s actions argue ESG is just the latest example of the world trying to “build up.”
Only two Democrats in the Senate voted in favor of the measure, making it unlikely that supporters of the effort in Congress could reach the two-thirds majority needed in each chamber to override a veto.