Biden issues first veto, defending Labor Department’s ‘ESG’ rule

WASHINGTON (AP) — President Joe Biden He cast the first veto of his presidency Monday as he sought to block Republican-led efforts in Congress to overturn a Labor Department rule that allows retirement plans to consider environmental, social and governance factors when making investment decisions.

The Labor Department rule ended a Trump-era ban on retirement plan administrators considering factors such as climate change or pending lawsuits when making investment decisions. With the suits and climate change having financial repercussions, administration officials argue that their predecessors expected a potential disaster.

Critics say ESG investments allocate money based on political agendas, such as a campaign against climate change, rather than earning the best returns for savers. Republicans in Congress who pushed the measure to overturn the Labor Department’s action argue that ESG is just the latest example of the world trying to “wake up.”

Only two Democrats in the Senate voted in favor of the measure, making it unlikely that supporters of the effort in Congress will be able to achieve the required two-thirds majority in each chamber to override the veto.