The bill would have eliminated a rule that allowed certain retirement plans to consider environmental, social, and corporate governance factors when selecting investments.
Republicans did not support the rule and argued that retirement plans should make investment decisions based on the best rate of return.
The bill passed the House by a vote of 216-204 on February 28 and then passed the Senate the next day by a 50-46 vote.
Biden said that eliminating the rule could put the retirement savings of Americans at risk.
"I just signed this veto because the legislation passed by the Congress would put at risk the retirement savings of individuals across the country," President Biden said in a video posted on his Twitter account. "They couldn't take into consideration investments that would be impacted by climate, impacted by overpaying executives, and that's why I decided to veto it."
Congress has the power to override Biden's veto with a two-thirds majority vote, but that appears unlikely.