Biden’s First Veto Will Protect Hard-Working American Retirees
Biden’s veto will increase freedom and decrease risk in retirement plan investments
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Stefanie Spear, [email protected], 216-387-1609
BERKELEY, CA—MARCH 14, 2023—Investors support President Biden’s commitment to veto a Congressional Review Act (CRA) bill intended to overturn a Department of Labor (DOL) rule that empowers retirement plan fiduciaries to consider material environmental, social, and governance (ESG) risks when making investment and proxy voting decisions.
The effort to roll back the DOL rule is an attempt to force retirement plan fiduciaries from mitigating the growing material risk from environmental and social issues such as climate change and racial justice. The rollback would narrow fiduciaries’ ability to protect their beneficiaries and restrict basic freedom of choice. Biden’s decision to veto the bill is aligned with the administration's goal of upholding basic tenets of the free market and protecting workers' retirement savings from climate change, injustice, and other material financial risks.
“President Biden’s commitment to veto the CRA bill demonstrates that common sense and free markets are his top priority,” said Andrew Behar, CEO of As You Sow. “While some politicians are playing politics with retirees’ hard-earned savings, this administration has committed to protecting American workers’ and retirees’ financial security by allowing them to make investment choices without government interference.”
This past year, ESG investing has been at the center of a political crusade to force the markets to ignore environmental, social, and governance risk factors in investment decision-making. The DOL’s “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” rule has codified ESG as an allowable framework for assessing risk, allowing plan fiduciaries to consider the full range of material risks that could threaten American workers’ nest eggs.
Politics aside, there is clear demand from employees for investment options that mitigate material risk. According to a recent Schroders’ study: 87% of defined contribution plan participants want their investments to be aligned with their values; 74% said they would or might increase their overall contribution rate if offered ESG options; and 78% believe companies that are socially responsible (ESG-focused) will have better results over time than companies not socially responsible.
Biden’s commitment to veto the CRA bill upholds workers’ freedom of choice when selecting retirement plan investments.
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As You Sow is the nation’s leading shareholder advocacy nonprofit, with a 30-year track record promoting environmental and social corporate responsibility and advancing values-aligned investing. Its issue areas include climate change, ocean plastics, pesticides, racial justice, workplace diversity, and executive compensation. Click here for As You Sow’s shareholder resolution tracker.