Sen. Chuck Schumer (D-NY) applauded President Biden‘s first use of veto power, as Biden slammed the door on GOP-led legislation that would have reversed a Department of Labor rule allowing financial retirement professionals to consider ESG criteria around investments.
The Senate Majority Leader wrote that Biden’s veto “was the right thing for American companies and families.”
MAGA Republicans were ostrich-like in their actions, putting their heads in the sand, denying the realities of the changing world, and trying to force American companies to do the same.— Chuck Schumer (@SenSchumer) March 20, 2023
This veto was the right thing for American companies and families.https://t.co/rsAaIFVaDo
Schumer added: “MAGA Republicans were ostrich-like in their actions, putting their heads in the sand, denying the realities of the changing world, and trying to force American companies to do the same.”
The Senator added that “for House Republicans to tell American companies they cannot pursue profits and societal goals when they wish to would be counterproductive and un-American.”
The “realities” Schumer says MAGA Republicans are denying include environmental concerns like climate change and societal concerns like social criteria (the S in ESG), which addresses “the relationships a company has and the reputation it fosters with people and institutions in the communities where it does business,” according to consulting giant McKinsey, which says the S “includes labor relations and diversity and inclusion.”
[Note: ESG is portrayed by its opponents as a threat to purely profit-seeking capitalism, as it elevates reputedly secondary business criteria like environmental impact, social criteria, and governance. Conversely, ESG proponents working from a purely fiscal perspective assert that any business which does not carefully consider labor relations or environmental impact is not preparing responsibly for the future, a neglect that endangers its profitability.]
But the point of the Biden veto wasn’t to force fiduciaries to consider ESG when investing money — it was simply to allow them to consider the component. The GOP legislation sought to block ESG as criteria worthy of consideration.
Biden, like Schumer, also taunted MAGA Republicans in announcing the veto, including singling out Georgia Congresswoman Marjorie Taylor Greene for special derision. (She replied with her own derision.)
Biden said: “This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like. Your plan manager should be able to protect your hard-earned savings—whether Rep. Marjorie Taylor Greene likes it or not.”
The GOP bill portrayed ESG consideration as a toxic thorn in the side of capitalism that had to be plucked out, while the White House claimed there is “extensive evidence” that good ESG policies at companies actually help the bottom line. (McKinsey research has shown that ESG can be a profit enabler.)
Most of the comments on Schumer’s post are negative, decrying ESG as mere “virtue signaling.” It’s notable that JP Morgan Chase, whose annual gross profit for 2022 was $128.695 billion, has ESG policies in place, saying that “ESG matters are an important consideration in how we do business.”
Some Biden resisters even ok’d the move, as shown in the tweet below.
I rarely support this administration but, this was a good call. It is however important to weigh environment impacts fairly. Carbon emissions are only a small part of environmental protection.— Seth Austin (@Copekindly) March 20, 2023