US judge will not block Biden rule on socially conscious investing
2023.09.21 19:20
© Reuters. FILE PHOTO: U.S. President Joe Biden convenes the fourth virtual leader-level meeting of the Major Economies Forum (MEF) on Energy and Climate at the White House in Washington, U.S., April 20, 2023. REUTERS/Kevin Lamarque/File Photo
(Reuters) – A federal judge in Texas on Thursday rejected a bid by 25 states to block a Biden administration rule allowing employee retirement plans to consider environmental, social and governance (ESG) issues in investment decisions.
U.S. District Judge Matthew Kacsmaryk in Amarillo, Texas, declined to block the rule, which took effect Jan. 30. The judge granted a petition by President Joe Biden’s administration to dismiss the Republican-led states’ lawsuit claiming the rule will jeopardize millions of Americans’ retirement savings.
Congress in early March passed a Republican-backed resolution to repeal the rule. Biden, a Democrat, vetoed the proposal on March 20.
The rule, finalized in November, reversed restrictions adopted by former President Donald Trump’s administration on considering ESG factors in making investment decisions.
ESG investing involves weighing companies’ records on environmental, social justice and labor issues, as well as corporate governance matters such as board diversity and executive compensation, along with traditional financial considerations.
