Traditional economists urge Trump to overturn Biden's ESG pension regulation regarding DOGE (Dogecoin) investments.
The Biden-era rule governing Environmental, Social, and Governance (ESG) investments in private pension plans, known as the Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights Rule, is facing a re-evaluation after the Trump Administration's Department of Labor expressed concerns about its implementation.
Two economists from the American Institute for Economic Research (AIER) have urged the Department of Labor to reconsider the rule, arguing that it allows pension fund managers to prioritize non-financial factors such as climate change and green energy when making investment decisions.
"The Biden-era rule permits a few fund managers to make decisions based on nonpecuniary ESG factors, without demonstrating or even stating that these decisions benefit the people whose funds they manage," Dr. Paul Mueller, a senior research fellow at AIER, told FOX Business.
Mueller expressed concerns that without a clear demonstration of benefits, pensioners might suffer if their funds are invested in a manner that prioritizes social or environmental factors over financial returns. Thomas Savidge, another research fellow at AIER, echoed these concerns, stating that the rule lacks the investor protection promised by its title.
Despite the rule's name suggesting a focus on prudence in investment decisions, Savidge noted that it had "anything but prudence" in practice, as it muddies the waters for pension managers deciding between ESG investments and traditional financial strategies.
The AIER economists aren't the only ones voicing their concerns. Several state officials have demanded stricter federal regulations regarding ESG investments to protect Americans' retirement plans. This call for regulation is in response to the Biden pension rule, which allowed private fund managers to consider ESG criteria when making investment decisions.
The ESG-oriented exchange-traded funds (ETFs) have faced criticism and legal challenges recently, culminating in BlackRock's decision to eliminate its 'Net Zero' membership and climate commitment amid political pressure from conservative groups. Financial regulators have also started cracking down on so-called "greenwashing" by investment funds.
The Trump Administration's Department of Labor plans to rescind the Biden-era ESG rule and draft a new one that focuses more on traditional financial considerations in retirement plan investments. This move is expected to affect the investment strategies of many pension funds across the country.
- The AIER economists have urged the Department of Labor to reconsider the Biden-era rule on ESG investments in private pension plans, arguing that it lacks investor protection promised by its title.
- The ESG-oriented exchange-traded funds (ETFs) have faced criticism, legal challenges, and political pressure, leading financial giants like BlackRock to reconsider their commitment to climate-focused investments.
- Several state officials have demanded stricter federal regulations regarding ESG investments to protect Americans' retirement plans, as the Biden pension rule allowed private fund managers to consider ESG criteria when making investment decisions.
- The Trump Administration's Department of Labor plans to rescind the Biden-era ESG rule and draft a new one that focuses more on traditional financial considerations in retirement plan investments, which is expected to impact the investment strategies of many pension funds across the nation.
- In the context of the ongoing debate, pension fund managers are confronted with a dilemma: balancing their social and environmental responsibilities with ensuring the financial returns needed for the retirement plans of millions of Americans.
%20investments.){kind=link}