May 25, 2024  |  
 | Remer,MN
Sponsor:  QWIKET.COM 
Sponsor:  QWIKET.COM 
Sponsor:  QWIKET.COM 
Sponsor:  QWIKET.COM Sports Media Index – Perfect for Fantasy Sports Fans.
Sponsor:  QWIKET.COM Sports Media Index – Perfect for Fantasy Sports Fans. Track media mentions of your fantasy team.
American Thinker
American Thinker
11 Feb 2023
Thomas Lifson

NextImg:A Biden Labor Dept. rule change could force your retirement nest egg to be invested in Solyndra-like green and woke companies

Joe Biden is opening the door for the investment management companies that handle the retirement funds of 152 million Americans to no longer seek the best financial returns, but instead fund companies, like Solyndra, that pledge to advance the progressive agendas encapsulated in the expression ESG (Environmental, Social and Governance). The New York Post editorially warns us: “Don’t let Biden & Co. force YOUR nest egg to be invested in woke-only companies.”

A new Biden Labor Department rule aims to steer the retirement funds of 152 million Americans toward companies with woke policies on climate change and other “environmental, social and governance” goals.

 Under the Biden rule, fund managers would no longer be limited to investing workers’ assets “solely in the interest of participants and beneficiaries,” as the law has long required. Instead, they could also “consider climate change and other environmental, social and governance factors when they select investments and exercise shareholder rights” — by implication, even if it doesn’t maximize returns for workers.

Climate-change and social-justice warriors began pushing companies to adopt ESG practices, and for large shareholders to invest in them, back in the Obama era. But President Donald Trump banned retirement-fund managers from using worker cash for such political purposes. The new Biden rule would override that.

At a time “when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons,” warns Sen. Mike Braun (R-Ind.), who’s pushing a resolution to block the rule.

It’s “irresponsible of the Biden administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes,” fumes Sen. Joe Manchin (D-W.Va.).

There is a bill in Congress to stop this, but as the Post notes, Manchin is the only Democrat in the Senate openly opposing the ESG rule, meaning Kamala Harris could break a tie and vote down the bill there. But even if the bill passed both the the House and the Senate, Biden could veto it.

A separate line of attack is via the courts:

Last week, a group of 25 Republican state attorneys general filed a lawsuit against the Labor Department in a bid to block the ESG rule, Roll Call reported. The change will remain in place while the legal case proceeds.

The lawsuit alleged that the Labor Department’s alteration “contravenes ERISA’s clear command that fiduciaries act with the sole motive of promoting the financial interests of plan participants and their beneficiaries.”

Ron DeSantis has already take action in Florida, but that protects only state workers’ pension funds:

Florida Gov. Ron DeSantis, a likely candidate for the Republican presidential nomination in 2024, is among the most outspoken critics of ESG-based investment of taxpayer funds.

In August, DeSantis backed a resolution banning Florida state pension funds from considering ESG standards.

Recall that when Solyndra, the solar panel manufacturer, went bankrupt and cost taxpayers about half a billion dollars to pay off loans that were federally guaranteed, the early investors made money. That’s how it’s done when structuring deals that rely on government subsidies and guarantees. The crony founder or early investors get their money back right away, regardless of the success or failure of the venture. The investors that come in later – as the pension funds guided by ESG would – bear all the risk. And with goal of profit subordinate to the other progressive goals, those profits are highly uncertain.

Photo credit: J. P. Valery CC BY-SA 4.0 license