Senate PASSES bill to remove Biden’s ESG rule for retirement plans: Biden to veto

The Senate voted 50 to 46 to block a Biden administration rule that allows retirement fund managers to consider environmental, social and governance (ESG) factors in investment decisions for nearly half the country.

Moderate Democratic Sens. Joe Manchin, W. Va., and Jon Tester, Mont., supported the Republicans on the disapproval resolution. Sens. John Fetterman, D-Pa., and Dianne Feinstein, D-Calif., did not vote because they deal with health issues.

The bill now goes to the president’s desk, and White House press secretary Karine Jean-Pierre said she would veto it. The legislation is not expected to override a president’s veto, which requires a two-thirds vote in both the House and Senate.

Democratic Sens. Joe Manchin, W. Va., and Jon Tester, Mont., joined Republicans in voting for a bill to block a Biden rule allowing ESG factors in private sector retirement fund decisions .

Before the vote, Manchin spoke on the full Senate about the measure, criticizing the Biden administration for its “relentless campaign to undermine our national security, our economic security.”

He said President Biden’s Department of Labor (DOL) prioritized the “liberal policy agenda over protecting and growing retirement accounts.”

On Tuesday, the House passed the disapproval resolution 216 to 204, with one Democrat, Rep. Jared Golden of Maine, voting with Republicans to block the rule.

Sen. Mike Braun, R-Ind., who led the efforts in the Senate, introduced the resolution and passed it by a simple majority Wednesday afternoon due to the Congressional Review Act.

The Labor Department unveiled a rule in November that allowed retirement managers to consider ESG factors, replacing a rule that required managers to focus on getting the best returns for the 152 million Americans who invest with the retirement plan. ERISA retirement.

The Employee Retirement Income Security Act of 1974 defines a strict fiduciary responsibility for nearly all long-serving pension plan professionals.

ERISA covers most employer-sponsored retirement plans and manages $11.7 trillion in assets.

The White House has said the rule, which would reinstate a provision that Trump struck down in favor of directing money managers to focus strictly on returns, “is not a mandate.”

“No fiduciary is required to make investment decisions based solely on ESG factors,” the White House Office of Management and Budget said.

“The rule simply ensures that retirement plan trustees must engage in a risk-return analysis of their investment decisions and acknowledges that these factors may be relevant to that analysis.”

Rep. Andy Barr, R-Ky., introduced the bill as Republicans make corporate ‘awakening’ their new battlefront

Democrats argue that the rule allows retirement administrators to make investment decisions that may be less profitable in the short term but more profitable in the long term as clean energy and sustainability projects become more lucrative.

On Tuesday, the S&P 500 ESG Index is down 9.5 percent in the past year but is up 10.5 percent in ten years. The S&P 500 Energy Index rose 24.1 percent in one year, but only 1.2 percent in ten years.

Various ESG ratings firms are charged with assessing the good and the bad, and some critics say that without proper measurement, the practice can amount to a “marketing scheme.”

Not everyone is against ESG: Several Wall Street asset advisers, including BlackRock, Inc., see green investing for retirement plans as an untapped and potentially lucrative market.