See what’s clicking on FoxBusiness.com
Starting Monday, retirement plan administrators will be able to take into account the environmental, social and governance (ESG) positions when making investment decisions as a Biden administration rule takes effect, despite the objection of 25 Republican-led states.
The Labor Department rule, first announced in November, reverses restrictions put in place under the Trump administration. It now faces a lawsuit from Utah and two dozen other states, who argue that it violates the Employee Retirement Income Security Act of 1974 (ERISA), which says retirement plan assets must be held for the sole purpose of providing benefits to participants in the plan, and that fiduciaries should act solely in the interests of the participants. GOP-led states say that by focusing on social and political agendas, plan administrators will compromise the growth potential of participants’ accounts.
“Allowing asset managers to direct hard-working Americans’ money into ESG investments puts trillions of dollars of retirement savings at risk in exchange for someone else’s political agenda,” Utah Attorney General Sean Reyes told FOX Business last week, saying the rule “must be stopped.”
The lawsuit was filed Thursday in federal court in Texas. The court has not yet ruled on the request for precautionary measure. If granted, the rule would be blocked for the duration of the case, pending any subsequent appeals.
West Virginia State Treasurer Riley Moore discusses opposition to BlackRock’s agenda and discusses the state’s new bill that will protect residents’ funds from ESG investments.
In recent years, massive asset managers and financial institutions have increasingly focused on prioritizing ESG factors when making key investment decisions. In particular, they have set their sights on investing in companies based on those companies’ efforts to combat climate change and reduce their carbon footprint.
companies like blackrock, State Street and Vanguard, which collectively manage trillions of dollars in assets, have taken leadership roles in the ESG movement. In response to the growing movement, attorneys general and financial officials in red states have fought back, canceling contracts with the companies and threatening legal action over how they handle client investments.
Louisiana Attorney General Jeff Landry says he is concerned that Wall Street banks will “wake up” buying assets at the expense of other investments to improve their social policy in “Cavuto: Coast to Coast.”
TEXAS CITIES BLACKROCK FOR DOCUMENTS RELATED TO ESG PUSH
The Labor Department did not respond to Fox Business’s request for comment on the lawsuit. In November, Labor Secretary Marty Walsh said the new rule would “help plan participants get the most out of their retirement benefits.”
Republicans, however, believe it does more to advance the Biden administration’s green agenda than help investors manage their retirement savings.
Labor Secretary Marty Walsh reacts to the November jobs report and shares how the economic outlook for 2023 is on “Varney & Co.” (FOX Business/Fox News)
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
“This rule is an affront to all Americans concerned about their retirement accounts,” Texas Attorney General Ken Paxton said in a statement to FOX Business. “The fact that the Biden Administration now chooses to risk the financial security of working-class Americans to further a pious political agenda is insulting and illegal.”
Thomas Catenacci of Fox Business contributed to this report.
