What is ESG and Should Retirement Funds Be Allowed to Use It?
Summary from the AllSides News Team
President Biden will reportedly use the first veto of his presidency to block congress from overturning a Labor Department rule allowing retirement fund managers to use the ESG framework in investment decisions. What is ESG, and is it smart for investors?
What is ESG: ESG stands for “Environmental, Social, and Governance” investing. An Associated Press (Lean Left) analysis broke down the three pillars of the ESG framework, which proponents claim can “highlight companies that may be riskier than traditional investing guidelines alone might suggest,” but critics fear leads to investing “based on political agendas… rather than on earning the best returns for savers.”
Voices Opposed: Republican lawmakers in Texas and Florida have proposed legislation to limit ESG investing. Two senate Democrats joined Republicans in voting to overturn the Labor Departments’ rule allowing ESG. The Washington Times Editorial Board argued an ESG-based approach leads investors to “make investment decisions based on what makes them feel good rather than what will earn the most money in the long run.”
Voices In Favor: BlackRock, the world’s largest investment company with over $8 trillion in assets, has defended its use of ESG. An opinion piece in Bloomberg questioned Republican actions against ESG investing, determining that “if socialism means state control of production, distribution and exchange of goods and services, then Florida and Texas fit the description.” The writer contrasts this with California’s pro-ESG stances, stating it has “allowed it to borrow more cheaply than Florida and Texas even though it has lower credit ratings.”
Featured Coverage of this Story
From the Left
Guess Who Loses After Florida and Texas Bar ESG Banks?What happens when Florida and Texas blacklist Wall Street’s largest municipal bond underwriters because of their support for environmental, social and governance practices? The answer is a hidden tax foisted on their residents amounting to hundreds of millions of additional dollars.
If socialism means state control of production, distribution and exchange of goods and services, then Florida and Texas fit the description. That’s not the case with California, whose embrace of ESG and free markets has allowed it to borrow more cheaply than Florida and Texas even though it has...
From the Center
Senate sends bill nullifying Biden’s ESG investing rule to president’s deskThe Senate approved a resolution on Wednesday that aims to reverse a Biden administration rule on environmental, social and governance (ESG) investing, setting up what could be the first veto of Biden’s presidency.
The Senate voted 50-46 to block the ESG rule, with two Democrats, Sens. Joe Manchin (W.Va.) and Jon Tester (Mont.), joining Republicans in opposing the Biden administration policy.
The measure already passed the House on Tuesday and will now head to Biden’s desk. The White House has said that Biden would veto the resolution.
In general, ESG refers to efforts to invest in...
From the Right
Biden turns his back on American voters in pursuit of green agendaPresident Biden told us early on that he’d put the green agenda high on the top of his list of things to accomplish. We should have believed him, but because many of us didn’t, we’re paying the price.
Mr. Biden got to where he is by being Lunch Bucket Joe, a friend to working men and women alike. He shared their struggles as a boy growing up in a working-class community in Scranton, Pennsylvania. He learned to embrace their values and understands their hopes and dreams.
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