Washington:
US President Joe Biden used his veto pen for the first time on Monday, ignoring a Republican-led bill that would prohibit pension fund asset managers from considering environmental, social and governance factors.
Biden tweeted that the bill would threaten “retirement savings by making it illegal to consider risk factors.” Republicans say the so-called ESG factors amount to political interference.
“Your plan administrator should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not,” Biden said, referring to the Republican congresswoman at the heart of the far-right wing of the Republican party.
Republicans used their narrow majority in the House of Representatives to push the bill through. In the Senate, the Democrats have a narrow majority, but three absentees and two party members joining the Republicans was enough to send the bill to Biden.
Proponents of the bill say the ESG factors are driven by left-wing societal considerations and should not be part of financial transactions.
Biden’s Labor Department reinstated the rule in November, overturning an attempt by former Republican President Donald Trump to penalize fund managers who consider climate change in their decision-making.
Democrats pointed out that the policy is neutral about how ESG factors are considered, as long as the mutual fund meets its obligations to its beneficiaries.
Big investment firms like BlackRock applauded the rule, which the Biden administration describes as a financial incentive for investors concerned about climate risks.
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