U.S. Congress votes to block ESG investing, with Biden likely to veto.
The U.S. Senate voted 50-46 to adopt a resolution to overturn a Labor Department rule making it easier for fund managers to consider environmental, social and corporate governance, or ESG, issues for investments and shareholder rights decisions, such as through proxy voting.
Mr Manchin, who hails from coal country in West Virginia, said the ESG rule “prioritises politics over getting the best returns for millions of Americans’ retirement investments”.
“This [rule] is just another example of how our administration prioritises a liberal policy agenda over protecting and growing the retirement accounts of 150 million Americans,” he said.
Majority Leader Chuck Schumer, D-N.Y., defended the Labor Department rule, which went into effect in November of last year.
“This isn’t about ideological preference — it’s about looking at the biggest picture possible for investors to minimize risk and maximize returns,” said Schumer. “Why shouldn’t you look at the risks posed by increasingly volatile climate incidents?”
“The last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons,” Sen. Mike Braun of Indiana, the Senate’s lead sponsor of the bill, said earlier this month.