Federal court rules in favor of Biden ESG retirement rule (2023)
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A federal appeals judge in Amarillo, Texas, issued a ruling on September 21 refusing to block the Biden Labor Department’s investment rule allowing ESG considerations in retirement plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). Texas and Utah are leading 24 other states in challenging the rule:
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A Biden administration rule that allows employee retirement plans to consider environmental, social and governance issues in investment decisions survived a legal challenge by 26 states on Thursday. Judge Matthew J. Kacsmaryk of U.S. District Court in Amarillo, Texas, said in a 14-page opinion that he would not block the rule, part of the so-called E.S.G. investment trend that places emphasis on companies’ records on labor issues, social justice and environmental factors. Judge Kacsmaryk’s opinion found fault with the lawsuit, filed in January by Republican-led states claiming that the rule violated the federal law governing retirement plans. Among other things, the opinion argued that Congress hadn’t specifically addressed whether factors such as E.S.G. could be used to determine investment priorities. “While the court is not unsympathetic to plaintiffs’ concerns over E.S.G. investing trends, it need not condone E.S.G. investing generally or ultimately agree with the rule to reach this conclusion,” Judge Kacsmaryk wrote. … In 2020, the Labor Department under President Donald J. Trump said it was seeking new federal regulations to discourage those considerations. In 2021, after President Biden took office, the department proposed rule changes that would make it easier for retirement plans to take social factors into account. Those changes took effect on Jan. 30. In March, Congress passed a measure blocking them, after two Democratic senators, Jon Tester of Montana and Joe Manchin III of West Virginia, joined Senate Republicans in a rebuke of Mr. Biden. Later that month, Mr. Biden used his first veto to keep the Labor Department rule in effect.[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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