Biden vetoes bill to overturn DOL ESG rule 

March 23, 2023

US President Joe Biden has vetoed a bill that would prevent pension fund managers from considering climate change and ESG factors in their investment decisions.  

On March 20, Biden issued the first veto of his presidency on legislation to invalidate the Department of Labor’s (DOL’s) new ESG rule for retirement plans.  

Biden announced his plans to veto the bill in March, after the US House of Representatives approved a suit put forward by 25 Republican states to overturn the DOL’s rule.  

The DOL’s new rule would enable retirement plans to consider ESG issues for investments and shareholder rights decisions.  

The rule also reversed previous regulation that stated considerations must be based solely on financial metrics, which was approved under Trump’s administration in 2020.  

However, Republicans claim the DOL’s rule would negatively impact the financial performance of plans that collectively invest $12 trillion on behalf of 150 million Americans.  

In a video, Biden said: “I just signed this veto because the legislation passed by the Congress would put at risk the retirement savings of individuals across the country.” 

“They couldn’t take into consideration investments that would be impacted by climate, impacted by overpaying executives. And that’s why I decided to veto it, it makes sense to veto it.” 

Following the President’s veto, the legislation will be sent back to congress and House Republicans have scheduled a vote on March 23 to override the veto. 

However, support from at least two-thirds of each chamber is required to override the veto, which has been deemed unlikely. 

Kevin McCarthy, speaker of the House of Representatives, said: “In his first veto, Biden just sided with woke Wall Street over workers. Tells you exactly where his priorities lie.” 

“Now — despite a bipartisan vote to block his ESG agenda — it’s clear Biden wants Wall Street to use your retirement savings to fund his far-left political causes.”