Attorneys General Sue Biden Admin Over Rule That Lets ESG Into Retirement Savings

Ben ZeisloftJanuary 27, 2023

Multiple Republican state attorneys general have filed suit The Labor Department is being sued over a new measure that would eliminate a previous ban on corporate governance investments (also known as ESG, among fiduciaries managing retirement funds.

The agency published the following: final rule last year that reflected the Biden administration’s directive to safeguard the economy from “climate-related financial risk that may threaten the life savings and pensions of America’s workers and families.” The new rule is effective immediately reverses Fiduciaries can now weigh, despite a ban previously placed under Trump’s administration. “the economic effects of climate change and other ESG considerations” So long as they are relevant to the risk-and return analysis.

The lawsuit 25 attorneys general filed a Thursday complaint contending that the new rule “undermines key protections for retirement savings of 152 million workers” Founded under the Employee Retirement income security Act, also known by ERISA. This statute establishes minimum standards of conduct in private sector pension plans.

Liberty Energy is one of the plaintiffs in the suit. This oil and gas company claims that the rule invites unfair competition. “activists” Proxy campaigns against the firm. “We are suing because this regulation makes it harder to protect our workers’ retirement security and impedes investing in our industry and its ability to provide reliable and affordable energy to our communities,” Liberty Energy CEO Chris Wright stated in a statement to The Daily Wire

The former rule Trump administration prohibited fiduciaries “selecting investments based on non-pecuniary considerations” They were required to “base investment decisions on financial factors” alone. Critics of ESG claim that the investment philosophy compromises profitability by combining political and socio-economic causes, such as reducing carbon emission and achieving racial diversification.

“This rule is an affront to every American concerned about their retirement account,” The Daily Wire was provided with a statement from Ken Paxton, Texas Attorney-General. “The fact that the Biden administration is now opting to risk the financial security of working-class Americans to advance a woke political agenda is insulting and illegal. For generations, federal law has required that fiduciaries place their clients’ financial interests at the forefront.”

American investors are skeptical about ESG investment strategies. They want their funds to be allocated in a political neutral manner. An exclusive poll According to The Daily Wire, 64% of respondents believed that the Daily Wire survey was valid last year. “individual investors whose savings are being invested” Should determine whether funds are appropriated according ESG standards. However, only 20% of those surveyed believe that. “Wall Street asset managers” These decisions should be made.

The suit is against Republican treasurers divested some $12 billion from asset management company BlackRock last year over the firm’s promotion of the ESG movement. Florida, Utah, Georgia, Ohio and Tennessee are among the other states that have joined the lawsuit.

“This is about protecting retirees in Louisiana and the rest of the country,” In a statement to The Daily Wire, Jeff Landry, the Louisiana Attorney General, said that. “Investments should be made using sound economic principles, not woke policies. These firms have a responsibility to invest with their client’s best financial interests in mind rather than Biden’s disastrous agenda.”