25 attorneys general sue Biden admin over retirement investment rule that places ‘woke’ priorities over profit

Twenty-five attorneys general from across the states have declared war on President Joe Biden’s new ESG rule.

As previously reported, last year the administration reversed a Trump-era rule that had effectively prohibited pension funds from investing retirees’ money into funds that benefit the environment but aren’t necessarily the best investment options.

The old rule had made it so that pension funds had to prioritize maximizing profit over trying to save the planet. As a result, pension funds weren’t allowed to factor in an investment’s ESG score.

According to the Corporate Finance Institute, an ESG score is a “measurement or evaluation of a given company, fund, or security’s performance with respect to Environmental, Social, and Governance (ESG) issues.”

It’s basically a measurement of how “woke” an investment or company is vis-a-vis taking care of the environment.

Returning to the present, on Thursday a coalition of 24 GOP states led by Texas sued the Biden administration to stop the new rule from being implemented.

“This rule is an affront to every American concerned about their retirement account. 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,” Texas Attorney General Ken Paxton said in a statement.

“For generations, federal law has required that fiduciaries place their clients’ financial interests at the forefront, and I intend to fight the Biden Administration in court to ensure that they cannot put hard-working Americans’ retirement savings at risk,” he added.

In a statement to the Daily Mail, Utah Attorney General Sean Reyes added, “The Biden Administration is promoting its climate change agenda by putting everyday people’s retirement money at risk. 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.”

“We are acting with urgency on this case because this illegal rule is set to take effect next week. It must be stopped,” he continued.

Speaking with Fox Business Network, Louisiana Attorney General Jeff Landry likewise added, “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.”

If implemented, the rule would affect the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that, according to the U.S. Department of Labor, “sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.”

The lawsuit filed Thursday notes that ERSA “covers approximately 747,000 retirement plans, 2.5 million health plans, and 673,000 other welfare benefit plans.”

“Employee benefit plans cover about 152 million workers, approximately two-thirds of the United States adult population, and more than $12 trillion in plan assets, equivalent to more than half of the nation’s gross domestic product,” the suit reads.

“The sheer magnitude of the assets that the [new rule] would affect—over half of the GDP of the entire United States—suggests that courts should hesitate before finding that DOL has authority to regulate in this area for nonfinancial purposes,” it continues.

The lawsuit comes months after congressional Republicans tried taking their own ax to the new rule by introducing an anti-ESG bill, the Safeguarding Investment Options for Retirement Act, to protect Americans’ pensions from the influence of ESG.

“[T]he Biden administration’s proposed changes to [the Employee Retirement Income Security Act of 1974] abandon fiduciary responsibility by allowing ‘woke’ ESG factors to dictate investment returns – putting Americans’ retirement savings at risk,” lead author Rep. Greg Murphy said in a statement at the time.

“Our commonsense legislation would impose strict enforcement measures to ensure that ‘woke’ Biden policies do not hinder Americans’ retirement savings. I am grateful to Republican Attorney Generals across the nation who are fighting back against the Biden administration’s radical policies and leading the charge against ESG at the state level,” he added.

Governors like Florida’s Ron DeSantis are also fighting back. In August, he passed a resolution “directing the state of Florida’s [pension] fund managers to invest state funds in a manner that prioritizes the highest return on investment for Florida’s taxpayers and retirees without considering the ideological agenda of the environmental, social, and corporate governance (ESG) movement.”

“This update to the fiduciary duties of the SBA’s investment fund managers and investment advisors clearly defines the factors fiduciaries are to consider in investment decisions and states that ESG considerations will not be included in the state of Florida’s pension investment management practices,” a press release from the governor’s office reads.


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