Senate overturns federal rule on ESG investments, Biden vows to veto

The Senate on Wednesday voted to overturn a Labor Department rule that permits fiduciary retirement fund managers to consider climate change, good corporate governance and other factors when making investments on behalf of pension plan participants.

The final vote in the Senate was 50-46, with two Democratic senators crossing party lines to support the repeal bill: Sen. Joe Manchin of West Virginia and Sen. Jon Tester of Montana. Both are up for reelection next year in conservative-leaning states.

President Joe Biden said Monday that he will veto the Senate bill if it comes to his desk — the first veto of his presidency.

The House version of this bill passed Tuesday with the support of every Republican and one Democrat, after which it advanced surprisingly quickly to the Senate.

Buoyed by wins in November’s midterm elections, Republicans have vowed to use their new clout in Washington to take aim at “woke capitalism” — starting with an all-out assault on environmental, social, and corporate governance, or ESG, investing policies. ESG funds are designed to attract socially conscious investors with portfolios of companies that, for example, do not contribute to climate change or that practice good corporate governance.