Republican Speaker of the House Kevin McCarthy (Calif.) announced on Twitter that he had officially signed the first bipartisan legislation of the year on Thursday, blocking a Labor Department rule that would have facilitated environmental, social, and corporate governance (ESG) investing.
“Congress voted to block Biden’s woke ESG rule,” McCarthy stated. “The House and Senate both passed it. I just signed it. Next stop → The President’s desk. I hope he sides with American workers over Wall Street.”
According to a report from Reuters, the U.S. Senate voted 50-46 to adopt the resolution to block the Labor Department’s rule that would have made it easier for fund managers to “consider environmental, social, and corporate governance, or ESG, issues for investments and shareholder rights decisions, such as through proxy voting.”
The House of Representatives initially passed the bill in late February, voting 216-204 to kick the ESG rule to the curb.
To clarify, ESG investments have come under intense scrutiny in recent months, and for good reason. According to Fox News, ESG investors will look at environmental, social, and corporate governance factors before considering whether something is a viable purchase or risk. For example, a company’s environmental footprint might be taken into consideration, as well as their stance or interactions with complex social issues, like race or abortion, via Fox.
In fact, the ESG system has been likened by some to the Chinese social credit system, which creates a rigid society where citizens’ freedom is driven by their social credit “score.”
Fox Business reported in 2022 that Justin Haskins, the editorial director of Heartland Institute, bluntly drew the comparison when he told the outlet, “If you want to transform society through a social credit scoring system, you can do a lot of that through corporations and banks and financial institutions and Wall Street, but at some point, you probably are going to have to apply that to individuals as well.”
Speaker McCarthy called Thursday’s official signing of the resolution a “historic moment,” slamming the Biden administration’s efforts to “fund left-wing activism at the expense of their retirement savings.”
Via Reuters, Joe Biden is expected to veto the bill.