US President Joe Biden has rejected a Republican proposal to prevent pension funds from basing investment decisions on ESG factors in his first use of a veto.

Last year, the US Labor Department enacted a rule to make it easier for retirement plans to take into account ESG factors in their investment decisions. Republicans then introduced a bill to block it which passed Congress on 1 March when the Senate voted 50-46 to adopt a measure to overturn it.

US President Joe Biden has now vetoed the bill that would have stopped fund managers basing investment decisions on ESG factors. Republicans say the rule would politicise investing leading to woke investing decisions and hitting the performance of investments. On Twitter, Biden said: “I just signed this veto because the legislation passed by the Congress would put at risk the retirement savings of individuals across the country.”

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