“I have a pen that can intervene.” Since the Democrats lost control of the House of Representatives, the president of the United States has already declared that he will not pass laws through the hoop. Since the Senate is relatively controlled, Joe Biden has yet to use the pen of the concession, but this was released on Monday. The interrupted event is not related to taxes, guns, social security, abortion, immigration or other big issues that dominate US politics, but with sustainable investment criteria known as ESG (English projects for environment, social and governance) .
Republicans have pointed to the investment of sustaining the war and made it a place for culture war. Many of them think that the way of action is to put a backdoor on issues such as the fight against climate change or equal rights. Therefore, with the majority of those in the House of Representatives and the support of some dissident Democrats in the Senate, they decided that pension managers could not take into account ESG criteria when deciding on investments, as the rule allows. that he wanted to repeal the opposition issued by the Department of Labor.
The controversy was more theoretical than practical. The rule that the Republicans wanted to repeal does not force them to consider sustainability issues, but simply allows them to do so. On the other hand, when they invest assets, administrators must rule for the benefit of the participants, but no one asks them to account for their decisions. If they believe that companies that respect sustainability criteria will do better, they can invest in them. Even if the Labor Department’s rule had been overturned, the practical effect would have been small.
Biden returned to Congress without signing the Senate’s approval. In the American system of checks and balances, the president can refuse to sign a law passed by the Senate or a smaller (as here) Congress.
The president says Republicans want to repeal the rule that “protects the health and hard-earned pensions of tens of thousands of workers and retirees across the country.” “It allows the retirement plan managers to make fully informed investment decisions, taking into account all the relevant factors that can affect the potential investment, while ensuring that the investment decisions made by the private plan managers maximize the financial return to the retirees,” he pointed out in his message to the House of Representatives in which he intervened.
Republicans argue that the ESG criteria excite capitalism, as they call it derogatory, referring to those who are allegedly excited about injustices and social problems and prepare to fight them. They woke up, they declared war, they put a sustainable investment on the trigger. His accusation is that the benefit of the participants is sacrificed to impose other points in the progressive agenda.
Biden disagrees on this issue: he responds that there is a lot of evidence showing that environmental, social and governance factors can have a significant impact on markets, sectors and societies.
“The government is deliberately forcing retirement administrators to ignore relevant risk factors, ignoring free market principles and jeopardizing the life savings of working families and retirements. In fact, this would deliberately prevent the Senate from looking at the reasons for the protection of policies, such as the physical risks of climate change and poor corporate governance that would affect the profit of money, “says the president in his message, who believes that if it is possible “to take into account any factor that maximizes the return “This is not controversial, nor is it common sense,” he concludes.
Biden has stopped things when it comes to pension plans, but the fight continues on other fronts. More than a dozen red states are promoting anti-ESG laws, which prevent public funds from dealing with these criteria or awarding bids to companies they deem to be unacceptable. Texas, for example, intends to defend itself with this powerful hydrocarbon region.
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