President Joe Biden issued his first-ever veto on Monday, rejecting a bill that would have reversed a rule instituted by his own administration that allowed money managers to use environmental, social and governance (ESG) factors when making retirement investments on a client's behalf. 

U.S. Rep. Mike Rogers (R-Saks) took to Twitter to condemn the president's actions and for supporting ESG investing. 

"Get woke politics out of Americans' savings accounts," Rogers tweeted while sharing another tweet from the House Republicans with news about Biden's veto.

ESG is an approach to evaluating how a corporation aligns itself with social goals beyond earning a profit for its shareholders. These goals often include environmental sustainability, advocacy for certain social movements, and commitment to "diversity, equity and inclusion" (DEI).

Organizations, such as MSCI, award ESG scores to corporations supposedly based on their adherence to ESG values. Large asset management groups, such as BlackRock Inc. and State Street, and banks, such as JPMorgan and Bank of America, use ESG ratings to choose where to direct capital.

ESG investing has become controversial as its critics have dubbed it a "wokeness report card" and compared it to China's social credit score system.

Republicans in the U.S. House of Representatives passed the bill to prohibit ESG criterion from being considered in employee pension plans 50-46 with the help of two Democrats: Joe Machin (D-W.Va.) and Jon Tester (D-Mont.). Since overturning a veto requires two-thirds of both chambers, Republicans are not likely to do so.

Last week, Fla. Gov. Ron DeSantis, Alabama Gov. Kay Ivey, and the governors of Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, West Virginia, and Wyoming released a joint statement vowing to "work together and leverage our state pension funds to force change in how major asset managers invest the money of hardworking Americans."

According to the statement, the 19 governors may block the use of ESG in all state and local public investments and ban "social credit scores" in banking and lending.

Biden defended his decision to veto the bill in a video released on Twitter on Monday morning.

"The legislation passed by Congress would put at risk the retirement savings of individuals across the country," Biden said. "They couldn't take into consideration investments that would be impacted by climate, impacted by overpaying executives, and that's why I decided to veto it. It makes sense to veto it."

To connect with the author of this story or to comment, email will.blakely@1819news.com or find him on Twitter and Facebook.

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