The Retirement Fund Rule on ESG Biden Vowed to Save

Under President Joe Biden, the US Department of Labor put in place a rule that allows managers of retirement plans to weigh climate change and other environmental, social and governance (ESG) issues in their investment decisions. The move undid an effort under then-President Donald Trump to block such investments. The rule has become a focus in a fight over what proponents call sustainable investing and opponents call “woke capitalism.” With the help of conservative Democratic senators, Republicans in Congress passed a measure to repeal the rule, but Biden issued the first veto of his presidency to keep the rule in place.

In 2020, the Labor Department proposed a new rule that would change the Employee Retirement Income Security Act of 1974 (ERISA) to require those overseeing pension and 401(k) plans to always put economic interests ahead of what it called “non-pecuniary” goals.