25 Republican AGs sue Biden administration over ESG retirement plan rule trends now
The Republican attorneys general from 25 US states have filed a lawsuit challenging the Biden administration's plan to allow retirement fund managers to make 'socially conscious' investment decisions.
The federal suit filed on Thursday in US District Court for Northern Texas seeks to halt implementation of the Department of Labor rule, which allows private benefit plans to invest in funds focused on environmental, social, or governance (ESG) issues.
The suit alleges the new rule 'undermines key protections for retirement savings of 152 million workers... totaling $12 trillion in assets' in the name of social policies, including addressing climate change.
The rule, set to take effect on January 30, reverses a restriction imposed during the Trump administration that requires retirement plans to consider only financial factors in making investment decisions and exercising shareholder rights.
'The Biden Administration is promoting its climate change agenda by putting everyday people's retirement money at risk,' said Utah Attorney General Sean Reyes, who is leading the suit, in a statement to DailyMail.com.
Utah Attorney General Sean Reyes is leading 24 other GOP attorneys general in a lawsuit challenging the Biden administration's rule easing restrictions on ESG investments
The Labor Department and Biden's Labor Secretary Marty Walsh (above) are named as defendants in the suit, which was filed on Thursday in US District Court for Northern Texas
'Permitting asset managers to direct hard-working Americans' money to ESG investments puts trillions of dollars of retirement savings at risk in exchange for someone else's political agenda,' he added.
'We are acting with urgency on this case because this illegal rule is set to take effect next week. It must be stopped,' said Reyes.
The Labor Department and Biden's Labor Secretary Marty Walsh are named as defendants in the suit. A spokesman for Walsh did not immediately respond to request for comment on Thursday night.
The final rule at the heart of the dispute is known as the 'Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights' and took up 65 pages in the Federal Register when it was published on December 1.
If it takes effect as planned on Monday, it would rescind a 2020 Trump-era rule that had been criticized by some business groups and the financial industry.
The Labor Department has argued the Trump-era rule restricting investments in ESG funds failed to account for the positive impact that ESG considerations can have on long-term investment returns.
The new rule also allows plan fiduciaries to consider ESG factors when proxy
