President Joe Biden issued his first veto against a bipartisan bill that sought to protect millions of Americans’ retirement plans from woke investments. His action shows he prioritizes politics over Americans’ financial security.
Early this month, the U.S. House and Senate passed a bipartisan resolution to prevent fiduciaries of retirement plans from subordinating financial returns to woke causes. Biden chose to ignore all the concerns and warnings, including those from his own party. Instead, he used his first veto to preserve a so-called environmental, social, and governance, or ESG, rule that his administration adopted last year. His action confirms that despite his rhetoric of bipartisanship, he is an inflexible politician.
The Labor Department issued a new ESG rule last November, which “allows plan fiduciaries to consider climate change and other environmental, social, and governance factors when they select retirement investments and exercise shareholder rights, such as proxy voting.”
The ESG rule also reversed the Trump administration’s restriction on retirement plan investments in ESG companies or funds due to fear of subordinating “the interests of plans and their participants and beneficiaries to unrelated objectives.”
Supporters of ESG have claimed that ESG-focused investment funds have generated better returns than traditional funds. Yet growing evidence shows that ESG investments have not lived up to their hype.
For instance, a University of Chicago study found no evidence that high-sustainability (another name for ESG) funds outperform low-sustainability funds. Additionally, when the stock market was in turmoil last year, ESG funds did not fare better than traditional funds, thus offering investors no haven. In fact, according
