Biden Admin Slammed With Lawsuit Over Recent Choice Regarding ESG

A number of Republican state attorneys general have banded together to lay a large lawsuit at the feet of the Labor Department due to a recent measure that is attempting to cancel out a previously instated ban against environmental, social, and corporate governance investments, also known as ESG, among fiduciaries managing retirement funds.

Just last year, the agency officially published its final rule which reflected the directive from the Biden administration to try and safeguard the economy from “climate-related financial risk that may threaten the life savings and pensions of America’s workers and families.” as part of the new guidance, which would pull a 180 on the prohibition formerly created under the Trump administration, fiduciaries are permitted to weigh “the economic effects of climate change and other ESG considerations” for so long as the worried are entirely relevant in regard to a risk-and-return analysis.

This lawsuit was officially filed back on Thursday by a group of 25 attorneys general and contends that the new rule “undermines key protections for retirement savings of 152 million workers”  first set up as part of the Employee Retirement Income Security Act, also known as ERISA, a rule which created minimum standards of conduct for pension plans in the private sector.

One of the plaintiffs from the lawsuit is a group named Liberty Energy, a company specializing in oil and gas which contends that the rule would expressly call in “activists” to fight a number of 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,” explained Chris Wright, Liberty Energy CEO, as part of a release.

The former rule set up within the Trump administration blocked all fiduciaries from “selecting investments based on non-pecuniary considerations” and forced them to “base investment decisions on financial factors” alone. those against the fairly recent ESG movement claim that the investment practices goes alongside social and political causes, such as cutting carbon emissions and striving for forced racial diversity, in such a way that degrades profitability.

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

On average, investors across America are very skeptical of any and all ESG investment practices and want their funds dolled out in an entirely politically agnostic way.



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