The Nickel Report

President Biden issued his first veto today. Biden’s veto returns to Congress a joint resolution that attempts to nullify a recent rule from the Department of Labor regarding consideration of Environmental, Social, and Governance (ESG) factors when investing in retirement accounts. This rule went into effect on January 30, 2023, and allows for retirement plan fiduciaries to consider ESG factors when selecting investments and exercising shareholder rights. Some have said ESG investing is controversial because it allows for retirement plan fiduciaries to consider factors such as climate change and equity instead of focusing solely on maximizing financial returns; while others have argued that past measures prohibiting the consideration of ESG factors are equally problematic.

Environmental, social and corporate governance (ESG) – like climate change and environmental justice – has been a hot topic of discussion in the early days of the Biden administration. Illustrating the interconnectedness of the trending issues, climate change and environmental justice are pillars of ESG.

As the Biden Administration settles in and begins to appoint its designees to key executive and administrative agencies, a series of policy objectives are coming into focus.  Chief among them is expanded attention and regulation in the ESG space regarding environmental, social and governance issues at American businesses. In this post, we survey the expected direction of these initiatives at, for example, the SEC, Department of Labor, and EPA.