Biden’s ‘Do-Good’ Retirement Investing Rule Prepped for Release

A retirement investment regulation President Joe Biden believes is key to his climate change agenda is closer to release.

The White House regulatory gatekeeper has concluded its review of the rule easing Trump-era restrictions on environmental, social, and corporate governance retirement investing, according to an online posting Monday. That review by the Office of Information and Regulatory Affairs is the last step before a final regulation can be released.

ESG investing is still rare in 401(k)s, but the Biden rule could open up pathways for major environmentally-friendly money managers such as BlackRock Inc. to market new investment options. Still, the regulation’s development comes at a moment when many red states are rebuking what they call a “woke” investment agenda peddled by the White House.

Biden issued a pair of executive orders last year instructing the U.S. Labor Department’s employee benefits arm to “suspend, revise, or rescind” his predecessor’s ESG regulation. Trump’s 2020 rule had a “chilling effect” on retirement investors wanting to profit from green tech companies and corporate social reckonings, the DOL said.

The latest ESG regulation not only reverses course on Trump’s ESG and proxy voting rules, but it suggests, for the first time, that ESG consideration may be a fiduciary requirement. The rule has amassed hundreds of comments, many from private citizens who say they fear the government is choosing winners and losers on Wall Street.