Biden's first veto set to counter anti-ESG investing bill

ThitareeSarmkasat

The war on "woke" funds is continuing in Washington. The Senate just passed an anti-ESG measure that would overturn a Labor Department rule allowing fund managers and retirement plans to consider ESG (environmental, social, and governance) factors when making investment decisions.

President Biden has said that he will nix the new bill if it comes to his desk - marking the first veto of his presidency - but the developments could signal further shifts in asset allocation strategies. With trillions of dollars pouring into the ESG space, a fight is brewing over the market narrative, as well as the PR and positioning that managers seek to take advantage of when marketing their funds. Is BlackRock changing the ESG investing landscape?

Contrarian investors wanting to bet against ESG can buy the God Bless America ETF (NYSEARCA:YALL), which is up 16% since its launch in October 2022.

Comments

[User 48535522]

How did Sub-Prime mortgage lending work out (2008)? How about Solyndra? What's happened to every dollar given or loaned out to various industries and businesses over the years? I'd look at the data. Perhaps the federal government should just stay in its lane.

Basic scientific research that the private sector doesn't have the time or money for is fine, like nuclear fusion power research.

[Elons Mum]

@rbrucer I don't know. How did the auto industry bailouts work out?

[rbrucer65]

@Elons Mum I'd look at the underlying reasons as to why they needed a bailout in the first place. Ford refused it.

I was born in Detroit 1957. At that time, it was the industrial capital of the world after war time production in WWII. Unions like the UAW and corrupt politicians ruined it. Two black mayors went to prison for corruption. Foreign competition killed them.

[kmi]

For those confused, the legislation Congress is pulling back is a rule issued in November that "allowed retirement managers to consider ESG factors, replacing a rule that stipulated managers focus on getting the best returns for the 152 million Americans who invest with the ERISA retirement plan.

The Employee Retirement Income Security Act of 1974 defines a strict fiduciary responsibility to almost all pension plan professionals who have long adhered to.

ERISA covers most employer-sponsored retirement plans, managing $11.7 trillion in assets. "

ESG is an acronym for "environmental social and governance" and is left-wing code for a Marxist-angled climate change ideology, that doesn't comport with modern liberal economics or free-market capitalism.

ESG believers promote weak short term returns as being outweighed by long term 'climate' factors while ignoring the reality that science and analysis they are relying on has been flawed for over a half century.

Ultimately it will allow fund managers with an ideological pro-ESG bent to manipulate retiree portfolios to invest in their favored "climate change oriented" equities even when those equities are anticipated to underperform the broader market.

[bruderly]

@kmi fact-based science refutes your ideological diatribe. ESG is not Marxist; Adam Smith stated quite clearly that government has a DUTY to enact laws, rules & regulations to guide economic activity to protect "the Commons" from exploitation by "the Mercantilists" etc. GHG pollution has increased by 40% due to human activity empowered by the industrial revolution. This pollution is warming both oceans & atmosphere in ways that create more extreme weather events; aka climate chaos. ESG empowers institutions & individuals to make decisions that serve both individual & community needs. Banning consideration of ESG metrics distorts market competition, subsidizes ignorance and serves an authoritarian agenda that undermines democratic capitalism.

[Skipper 6 '71]

@kmi Very well stated. I agree. Thank you.

[Mountainbarony]

@bruderly just like you. Thank you.

[Richard Carleton]

How wonderful! So many people getting riled up at the idea that some would include morality in their investment plans. Real Americans see an opportunity in buying cheap stocks that those with a conscience or a long term view don't want. Imagine if such entities as YALL had existed in America's past. Imagine the profits one could have made in the consolidating slave markets post 1808 now that international trade no longer brought in a fresh foreign supply of black labor. In the late 1850's, put aside new fangled electricity and "woke" dreams of a trans continental telegraph and invest in the real America, and use traditional proven horses by investing in the Pony Express.

And if interested in YALL today, there is one more traditional benefit. - to the instigators. - 65 basis points investment cost, in sympathy with the costly investments of the past.

[Blowback2]

@Richard Carleton A certain party has no 'real' plans/ideas...hence the 'culture' wars. Even if everyone agreed with them and totally wiped ESG/Climate Change from the earth.....they would find another 'grievance '. 'tis all they have to offer....

[Elons Mum]

@Blowback2 exactly this

[Dives in Aeternum]

I love ESG, I hope everyone does it. I think of how easy it has made making money on oil and gas companies that were severely underinvested in simply due to so called 'activism.'

[Mountainbarony]

Yes ......why should a company even consider the negative consequences of its products, processes or practices......when it might actually cost time and money to do things better.....? Just because some woke snowflake whines ?
Why should we be concerned with silly things like Love Canal, Chernobyl, Fukushima, or the 1344 Superfund priority sites in the US alone, when it might reduce the dividend ? Let's get our priorities straight....Gimme Da Money !

[djf33]

@Mountainbarony You haven't looked at the real enviromental costs of electrification. This whole thing has been put forward with very little thought. It sounds nice but in reality 'renewables' are not renewable because you use finite resources to capture them. Also, all the mining for these finite resources, processing & disposal are at least as taxing on the enviroment.

[MaxGould]

@djf33 so by your logic, if "in reality 'renewables' are not renewable because you use finite resources to capture them" ... somehow, 'capturing' the non-renewables and simply setting fire to them is - better?

[Blowback2]

Repugniks: ‘ we don’t really have any plans so we’ll just have to keep playing the culture wars…its really all we know’.

[the dogman]

@Blowback2 the culture wars are from the democrats. Quit with the gaslighting

[bruderly]

@the dogman -baloney- wake up---GET WOKE---the Governor of Florida is trying to win the GOP nomination for POTUS by creating culture conflicts; aka he is aggressively using the power of the State to censor speech, promote junk science, ban books with criminal penalties for teachers & librarians, fire elected officials who question his dictates, fire academics, reorganize a public liberal arts university (New College) into a mecca for White Christian Nationalists, discriminate against LGBTQ people, usurp private property rights (Disney), arresting Blacks who "illegally" voted, ignoring Whites who actually submitted forged ballots, and is restricting the ability of the public to access the State Capitol...not to mention enacting Stand Your Ground & universal concealed carry laws to make it easier for people to kill each other on our streets & malls rather than resolve difference the old fashioned way.

[Blowback2]

@the dogman But...but....but..what about that other bogey man? CRT????..never mind.....

[Chancer]

Biden is the ESG Climate Change dufus clown president.

[mrkfgs]

ESG is total money grab and should be banned out right, but the gullible liberal investors continue to sop it up like the good little sheep they are.

[Skipper 6 '71]

This proposed regulation is the camel's nose under the tent. If this is allowed to happen, then it gives the federal government full license to direct investments to favored companies and prohibit investments in others.

[Chancer]

@Skipper 6 '71
More Biden/Democrat moves to dictatorship which include the recently disclosed (Twitter) censorship, banning, and canceling of any in social media who disagree with any part of Democrat agenda- labeling them as "Russian influencers."

Democrat actions to support their dictatorship agenda just encourages me to invest more in companies outside the US. I just keep increasing my already 84% in foreign stocks.

[Dividend Seeker]

I don't know how many times people need to be scammed before they learn their lesson. Clearly, the answer is "at least once more".

[User 31614085]

kind of surprised this even got thru the Demorat-controlled Senate...

[thirdcamper]

@MJL987 You forget that Manchin owns coal mines and is heavily funded by oil money. Always follow the money.

[Liberalismisasickness]

@thirdcamper Was it just Manchin... hmmm. or it is many reasonable thinking people?

[thirdcamper]

@Liberalismistherealhealthcrisis The question at hand is the Senate. All the GOP voted for it, then the two Dems were Manchin (see above) and Tester (Montana Senator, hmm, gee, oil, gas and mining, maybe?). No, I'm sure moneyed interests had nothing to do with it. Sweet reason only.

[tech87]

When can we stop pretending that Republicans are pro “free market” people. They are anything but and this dumb bill is another shiny example on a long list of dumb ideas.

Isn’t it just dumb and irresponsible not to include volatile climate events that could affect a companies performance in their risk profiles?

It’s all so silly - At this point Isn’t being anti woke or anti ESG just another way of saying “I’m an irresponsible selfish devoid of empathy a-hole that doesn’t give a crap about people, ethics, or the environment and the only thing that matters is money no matter what or who gets screwed on the process”?

[FrankTrades]

@tech87 The way DemocRats treat money, like an unlimited supply of water, you want to criticize any spending limit?

[Non-GAAP Earnings]

@tech87 I'm not a fan of political debate and won't go there. I just want to point out that nothing says you can't invest your own money in ESG. The rule in question is regarding pension funds and certain 401(k) funds, which are highly regulated. Since the 1970s, the rule has been that the long-term economic and fiduciary interests of the individual workers must be the foremost goal of these fund managers. It's been a strict rule the entire time.

[tech87]

@FrankTrades lol. 60% of our national debt is directly attributable to the GOP. Stop marketing make believe talking points as reality.
Where were you when trump blew a hole in the deficit with a tax cut for those that didn’t need it?

[Kwc0055]

I’m only investing in companies that underpay/abuse their employees, destroy the environment, and destroy society /s 😅. So much for a free market, if we can have strategies that focus on other criteria why should this one not be allowed? If there is demand for it there should be a supply imo.

[FrankTrades]

@Kwc0055 That’s not an opinion. It’s a political statement.

[Kwc0055]

@FrankTrades is it? Because if I only wanted to invest in dividend companies that wouldn’t be seen as political. Even though some would ruin their balance sheets, take out outrageous levels of debt, and layoff workers just to maintain their dividend. If the shareholders demand that, the company will cater to that. Just because you don’t agree with these shareholders on what they value out of the company that THEY own doesn’t mean it’s political.

[Skipper 6 '71]

@Kwc0055 Go ahead and invest in wherever you want. Just don't force the rest of us to use the same criteria. For me, I want to optimize returns, which every "prudent man" should do.

Have you bothered to read how the ESG score for a company is calculated? Look it up.

[MaxGould]

YALL must have been disappointed that the tickers MAGA and SWVL are already taken.

[Mr Nobodi]

YALL is just as full of hypocritical hot air as ESG funds are. Not a good recommendation.

[dandroidz]

Does biden even know what investing is, and more specifically ESG? I think he only understands capital gains from a laundromat in Ukraine

[thirdcamper]

Well, this one will bring out the usual 300 rants!

I don't buy ESG funds, personally, but see no reason why they shouldn't be allowed to be on offer in the free market like any other product or why pension and fund managers shouldn't be allowed to devise whatever criteria they see producing the best returns. (Some believe that investing methods that take into account sound corporate governance, coming environmental changes, etc., will outperform. It's not completely implausible, so why shouldn't they be free to pursue that thesis, even as others choose not to do so? This bill would bar ETFs from being sold in certain retirement accounts, preventing employees from even having the option. Absurd.)

[wiredlitigator]

@thirdcamper , you trust that this won't drive decisions rather than weigh what's best for the investor? It's OPM, like usual--I want a fiduciary and not someone with an agenda. Consider that.

[thirdcamper]

@wiredlitigator If I have a 401(k) should it be ruled out that I have ESG options? That seems like an agenda to me.

[rh_kul]

@thirdcamper No, no rants. You are absolutely right. Not a Biden fan, but this needs to be vetoed.

[SuperPac]

ESG is fundamentally anti-human. I urge the the middle classes to reconsider their position on ESG. Your natural kindness has been co-opted by the oligarchy by sugar-coating this poison pill. Have a look at the multi-billionaires backing it, the institutions of the uber-powerful like WEF and IMF shilling for it, read the details...are these people your friends? Ask yourself.

[Pmg1959]

@SuperPac Quakers oppose sin stocks, defense stocks, and stocks of companies that pollute the environment. These anti-ESG holdings are fundamentally inconsistent with their social mandate, I.e., their religion. Other organizations have similar restrictions. So what is the solution for them? Of course ESG investments should be made available. Get over it! This is not a political issue. It's a matter of freedom of choice and the expression of liberty. I might add that there are funds that intentionally hold sin stocks. That's fine too. Some people couldn't care less about ESG, and like the moat and pricing power many of these companies have. Somehow this has become a volley targeting libs. Let me summarize. Libs often are tree-hugging dummies and Trump is a worthless, maniacal crook. Now go get some ESG -- if you want it!

[Elons Mum]

@SuperPac Trying to preserve the climate so that there is a livable world for future generations is anti-human? How so?