Biden nixes anti-ESG bill with his first-ever veto

US President Joe Biden has blocked a bill that would have stopped retirement plans from incorporating ESG into their risk assessment, in his first-ever presidential veto.

On his reasoning for the veto, Biden explained: “Legislation passed by this Congress would put at risk the retirement savings of individuals across the country. They couldn't take into consideration investments that were being impacted by climate, or impacted by overpaying executives.”

The vetoed legislation had looked to overturn a ruling from December last year, which allowed fiduciaries to consider climate change and other ESG factors when making investment decisions and when they exercise shareholder rights, including voting on shareholder resolutions and board nominations.

Andrew Behar, chief executive of shareholder advocacy As You Sow, said: “President Biden’s veto of the this bill demonstrates that common sense and free markets are his top priority." 

Behar added: "While some politicians are playing politics with retirees’ hard-earned savings, this administration is protecting American workers’ and retirees’ financial security by allowing them to make investment choices without government interference.”

Veto

The veto will likely not be the last as Biden works with a Congress that became majority Republican in last year’s mid-term elections.

Of the vetoed bill, Kevin McCarthy, current Speaker of the House of Representatives, said: “In his first veto, Biden just sided with woke Wall Street over workers. Tells you exactly where his priorities lie. Now, despite a bipartisan vote to block his ESG agenda, it’s clear Biden wants Wall Street to use your retirement savings to fund his far-left political causes.”

Prior to the veto, the bill had passed the House 216 – 204, and the Senate 50 – 46. Democratic Senators Jon Tester and Joe Manchin sided with the Republican majority to get the bill through Congress.

In August last year, Florida governor Ron DeSantis has passed a resolution eliminating ESG considerations from pension funds in the state, with similar resolutions passed in the Republican held legislatures of Texas and Kentucky.