STEVE MILLOY: Biden Uses His First Veto to Sacrifice Americans’ Retirement Savings at The Altar Of ESG

From the Daily Caller

STEVE MILLOY

CONTRIBUTOR

In America’s hour of need, a call for help went out. Capitol Hill answered, but it went straight to voicemail at the White House. In his first-ever veto, President Joe Biden rejected a bipartisan resolution approved by the House and Senate that would have overturned a Department of Labor directive that greased the skids for ESG (environmental, social, governance) policies.

Elected by no one, activist retirement fund managers are wielding ESG policies as a stealthy means of imposing left-wing political objectives on the private sector economy. Frequently, ESG as a rating system to measure a company’s commitment to climate alarmist goals such as choking off oil and gas producers’ access to capital, and “social justice” policies that prioritize C-suite diversity over merit and embrace corporate-funded abortions, to name a few. Compliance is hammered into place through coercive investment and shareholder rights decisions, such as through proxy voting. (RELATED: SUZANNE DOWNING: Biden’s Interior Secretary Dishes Out Icy Revenge On Alaskans)

In aligning with the left’s environmental extremism, the ESG strategy promotes solar and wind energy investments, which are intermittent and unreliable forms of energy. Ultimately, a large portion of that American investment flows to China, which has a near-stranglehold on the raw component materials.

Simultaneously, misguided ESG policies are blocking investment in oil and gas production, driving inflation yet higher by causing the cost of heating our homes and fueling our cars and trucks to soar. Higher fuel prices translate into additional strains on the supply chain, and add costs to agricultural production that is being reflected in spiraling grocery store prices with which consumers are being forced to contend.

But don’t think for a moment that Biden is troubled with any of the suffering he is causing American families to endure. He has made the political calculation that his delusional aspiration of winning a second term would require that he bow before the false green gods of ESG and offer up the economy in sacrifice.

The real cherry on the woke ESG cupcake is that retirement investment funds’ adherence to leftist policy goals are prioritized above maximizing financial returns — often without shareholders’ knowledge.

Employer-sponsored retirement plans, such as 401(k)s and traditional pensions are subject to Employee Retirement Income Security Act (ERISA) standards, including the requirement that retirement plan fiduciaries act “solely in the interest of the participants and beneficiaries” for the “exclusive purpose” of “providing benefits to participants and their beneficiaries” and “defraying reasonable expenses.”

The Supreme Court ruled unanimously in 2014 that ERISA “benefits” must be of a “financial” nature rather than a collateral benefit, that would include advancing an ideological agenda.

But this past December, Biden’s DOL rule dismantled safeguards for retirement savers that had required retirement plan fiduciaries to evaluate investments and exercise shareholder rights based solely on the financial benefits to the plan and participants. The new Biden rule permits retirement savings to be placed into an ESG investment vehicle, without consent from the employee.

If a fiduciary finds that two investments are equal, the rule allows the fiduciary to use collateral ESG factors to break the tie without documenting the decision. The rule removes transparency tools that allowed plan participants to monitor how their savings are being used in proxy voting.

The irresponsibility of Biden’s rule is compounded by the fact that ESG products typically charge higher fees than traditional investment funds, which can significantly reduce participants’ retirement savings over time. And the kicker is that ESG funds have been underperforming for years. Additionally, ESG investments also expose investors to additional financial risk.

While responsibility has not been a hallmark of the Biden administration, officials on the state level have recognized this wide-scale violation and have taken action. Several state treasurers have sought to remove proxy voting power from activist asset managers.

Others have pushed back against the use of ESG factors in determining states’ credit ratings. Six major banks were subject of a probe launched in October by 19 state attorneys general, investigating their involvement in the “Net-Zero Banking Alliance,” an adopted ESG policy that, in effect, is a coordinated effort to kill energy companies by denying them access to financial resources.

In wielding his veto power for the first time to preserve a rule that puts investors at risk to advance an inflationary, ideologically driven agenda is irresponsible and serves as a glaring example of how out of touch President Biden is with ordinary Americans.

Steve Milloy is a Senior Legal Fellow at the Energy & Environment Legal Institute. He previously served as an EPA transition team adviser for the Trump administration.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.