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Biden administration pushes back on ESG ERISA lawsuit (2023)
| Environmental, social, and corporate governance |
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| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
On June 5, 2023, the Biden Administration sought the dismissal of a lawsuit brought against it by states challenging a Department of Labor rule on the use of ESG in retirement funds governed by ERISA. The states filed suit earlier this year, arguing that the new rule would put the retirement savings of millions of Americans at unnecessary and politically tinged risk:
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The Biden administration has asked a federal judge to toss out a lawsuit by Republican-led states seeking to strike down a rule allowing socially-conscious investing by employee retirement plans. The U.S. Department of Justice in a filing in Amarillo, Texas federal court on Friday said the rule was needed to replace improper limitations that the Trump administration had placed on considering environmental, social and corporate governance (ESG) factors in making investment decisions. A coalition of 25 states led by Utah and Texas sued in January, claiming the U.S. Department of Labor rule would imperil the retirement savings of millions of Americans by allowing investments to be made based on political agendas rather than financial considerations. The states moved last month for a ruling permanently blocking the rule, which took effect Jan. 30. The Biden administration on Friday said the rule makes clear that retirement plans must base decisions primarily on financial factors. But unlike the Trump-era rule, it also recognizes that issues such as climate change and social justice can impact companies' long-term financial health, the Justice Department said…. The new rule covers plans that collectively invest $12 trillion on behalf of 150 million Americans. Congress voted in March to repeal the rule but Democratic President Joe Biden vetoed the proposal. The case has been assigned to U.S. District Judge Matthew Kacsmaryk, a conservative appointee of former Republican President Donald Trump.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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