U.S. President Joe Biden flexed presidential muscle in March when he issued his first veto.
The offending legislation didn’t straitjacket his ability to conduct foreign policy or undo one of the signature accomplishments of his first two years in office. No, the bill overturned a Labor Department rule that gave pension fund managers more latitude in their investment decisions.
Specifically, it forbid institutional investors from using environmental, social and corporate governance, commonly referred to as ESG, issues to guide investment and shareholder rights decisions. It was the latest skirmish in an ongoing battle between business managers weighing a wider range of factors when making investment decisions and “traditionalists” and Republicans eager to attack “woke” liberal practices. There is a debate to be had over ESG investing, but its purpose should be to hone, not discard, an important tool in an evolving business environment.