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WASHINGTON — President Joe Biden issued his first veto Monday after Congress voted to block a Labor Department rule allowing retirement plans to weigh the long-term impacts of social factors and climate change on investments — a move Republicans say is a “woke” policy that hurts retirees’ pockets.
“I just signed this veto because the legislation passed by the Congress would put at risk retirement savings of individuals across the country,” Biden said in a video posted to Twitter. “They couldn’t take into consideration investments that would be impacted by climate impacted by overpaying executives.”
Senate Republicans, along with two Democrats, voted on the measure March 1, needing only a simple majority for it to pass. Sens. Jon Tester, D-Mont., and Joe Manchin, D-W.Va., who are both up for reelection next year in Republican states, voted with Republicans.
The GOP-controlled House of Representatives voted on the legislation last month. In a message to the House, Biden said “Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country.
“That is not controversial – that is common sense,” he said.
Ahead of the bill going to his desk, Biden said he would veto it. A two-thirds majority of Congress would be needed to override Biden’s veto.
President Donald Trump vetoed 10 bills, while President Barack Obama vetoed 12 bills.
What is ESG?
Environmental, social and governance or ESG for short, is an investing strategy that takes into account businesses’ environmental and social risks as part of a wider financial analysis.
It is popular with major pension funds that invest the retirements of millions of workers as well as retail investors.
Republicans call ESG ‘woke’
Republican lawmakers and conservative advocacy groups have decried the ESG rule.
Florida Gov. Ron DeSantis, who will likely run for the 2024 GOP presidential nomination, has become a leader in the anti-ESG movement.
Many conservative states, such as Florida, Texas and West Virginia have launched investigations because of the rule.
Conservative advocacy groups backed by right-wing donors have mounted a campaign in statehouses across the country. They say that ESG is just another example of “woke” influence on big business.
Reach Rebecca Morin at Twitter @RebeccaMorin_
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