President Joe Biden’s ESG (Environmental, Social, Governance) rule has been published in the Federal Registry.
This rule would allow investment funds to invest Americans’ 401(k) savings with one or both eyes on political correctness and social engineering goals rather than for earnings. Fortunately, Congress can use the Congressional Review Act (CRA) to keep the Biden Administration from wolfing down Americans’ retirement savings. Let’s take a look at how this proposed rule could impact you and what you can do about it.
What is the Biden ESG Rule?
The Biden ESG rule puts a thumb on the scale for “woke” investments that have historically not done that well in the free market. Financial advisors are now being encouraged to consider environmental, social, and corporate governance factors when evaluating potential investments, rather than just focusing on available data related to performance and return on investment. This means that they may put your money into projects that may have good intentions but may not be profitable in the long run.
Why You Should Be Concerned
The main concern with this rule is that it takes away your financial advisor's ability to make decisions based purely on numbers and data. They will now be making decisions based on political correctness instead of sound financial sense, potentially putting your retirement savings at risk without you knowing it. Furthermore, this proposed rule would also give companies an incentive to overstate their ESG credentials in order to attract more investment from financial advisors who are trying to meet their ESG goals.
How You Can Take Action
Now is the time for Congress to step in and protect Americans' retirement savings by using its power under the CRA which enables them to review and disapprove of rules published by federal agencies before they go into effect. By taking action now and voicing your opposition to this proposed rule, you can help ensure that your retirement savings are safe from harm caused by misguided government policies.