First Presidential Veto Maintains Freedom Of Workers To Consider Material Risks To Their Savings
WASHINGTON, DC — President Joe Biden issued his first presidential veto today, rejecting an attempt in the House and Senate to use the Congressional Review Act (CRA) to nullify the Department of Labor’s (DOL) recent rule that restored the ability for managers of retirement plans to consider environmental, social, and corporate governance (ESG) factors when making investment decisions and voting on shareholder proposals. The House and Senate both voted to pass the CRA several weeks ago.
The DOL rule provides options for workers and retirees who want to ensure the fund managers of their pensions consider climate risks and provide options to invest in sustainable businesses. The DOL reinstated the rule in November 2022, undoing a push by the Trump administration to impose additional costs and burdens meant to discourage fund managers from considering climate change in their decision-making.
In response to the news, the Sierra Club’s executive director Ben Jealous issued the following statement:
“We applaud President Biden for vetoing this dangerous effort that would have prevented Americans from considering the real-world impacts of the climate crisis on their investments. This is an act of solidarity with hardworking Americans over powerful corporate donors and fossil fuel interests, which have long attempted to roll back progress on workers’ rights and climate change. This veto maintains the freedom of workers and retirees to consider any and all material risks to their savings, and ensures that every American can adequately plan for their retirement with a long-term investing mindset.”
Background
In February 2023, the Sierra Club joined dozens of investors, workers, and advocacy groups in sending a series of letters to House and Senate lawmakers opposing Republican attempts to circumvent the DOL rule.
In November 2022, the Sierra Club applauded the DOL for restoring the rule, saying the decision “lays the groundwork for future rulemakings that establish affirmative duties of retirement fund fiduciaries to manage climate and other systemic risks.”
In December 2021, during the DOL public comment period, the Sierra Club joined the Americans for Financial Reform Education Fund and a dozen advocacy groups in showcasing support for the proposed rule.
Courtesy of the Sierra Club.
Message to the House of Representatives — President’s Veto of H.J. Res 30
Courtesy of The White House Briefing Room
TO THE HOUSE OF REPRESENTATIVES:
I am returning herewith without my approval H.J. Res. 30, a resolution that would disapprove of the Department of Labor’s final rule titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.”
The Department of Labor’s final rule protects the hard‑earned life savings and pensions of tens of millions of workers and retirees across the country. It allows retirement plan fiduciaries to make fully informed investment decisions by considering all relevant factors that might impact a prospective investment, while ensuring that investment decisions made by retirement plan fiduciaries maximize financial returns for retirees.
There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses. But the Republican-led resolution would force retirement managers to ignore these relevant risk factors, disregarding the principles of free markets and jeopardizing the life savings of working families and retirees. In fact, this resolution would prevent retirement plan fiduciaries from taking into account factors, such as the physical risks of climate change and poor corporate governance, that could affect investment returns.
Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country. That is not controversial — that is common sense.
Therefore, I am vetoing this resolution.
JOSEPH R. BIDEN JR.
THE WHITE HOUSE,
March 20, 2023.
Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Former Tesla Battery Expert Leading Lyten Into New Lithium-Sulfur Battery Era — Podcast:
I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...
