US President Biden uses first veto to block Republican anti-ESG funds bill

US President Joe Biden on Monday used his veto power for the first time and overrode a Republican-led bill that, as per AFP, would have barred retirement fund asset managers from taking into account environmental, social and governance (ESG) factors. Republicans claim that the so-called ESG factors amount to political interference.

Announcing his first veto on Twitter, Biden wrote that the Republican bill “would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like.”

Here, MAGA stands for Make America Great Again, a political slogan Donald Trump and his followers popularised. 

“Your plan manager should be able to protect your hard-earned savings,” he added.

Supporters of the Republican bill allege the ESG factors are driven by ‘woke’ leftist social concerns and should not be part of financial transactions.

Democrats, however, contest that as long as the investment fund is meeting its obligations to its beneficiaries, the policy is neutral on how the said ESG factors are taken into consideration. 

The Republican bill, as per Reuters, cleared the US congress earlier this month. The US Senate voted  50-46 to adopt the resolution which seeks to overturn a US Labor Department rule, making it easier for fund managers to consider ESG factors, etc.

Former US president Trump, in 2020, had issued a rule that was expected to discourage the consideration of environmental and social factors in this type of investment. 

In November of last year, Biden’s administration undid the move which sought to penalise fund managers for considering climate change in their decision-making.

(With inputs from agencies)

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