Senate clears resolution to nullify ‘ESG’ rule; Biden plans veto – JP
The Senate on Wednesday cleared a resolution that would disapprove of a Labor Department rule allowing retirement plans to consider climate factors in their investment decisions, setting the stage for the first veto of President Joe Biden’s presidency.
The Senate’s 50-46 vote on the resolution comes one day after the House voted 216-204 to pass it. The White House said Biden would veto the measure if it came to his desk. The resolution would nullify a Labor Department rule that allows retirement plans to consider environmental, social and governance factors in their investment decisions.
“The rule reflects what successful marketplace investors already know — there is an extensive body of evidence that environmental, social, and governance factors can have material impacts on certain markets, industries, and companies,” the White House said in a statement of administration policy.
“DOL issued the final rule after receiving extensive feedback from the public that revealed that the previous Administration’s rules in this area created problematic impediments for plan fiduciaries seeking to act in the best interests of America’s workers when making investment decisions.”
The department finalized the rule last year and it took effect in January. The department sought to strike a compromise, balancing between financial services companies that wanted clear rules and plan sponsors that didn’t want to be required to consider ESG factors. The rule reversed Trump administration changes to the implementation of 1974 legislation known as the Employee Retirement Income Security Act, a law that governs a broad range of retirement and health benefit plans.