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States seek to block U.S. Department of Labor ESG rule (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 |
Twenty-five states asked a federal judge in Texas on May 16 to block the implementation of the Biden Labor Department’s rule on the use of ESG in retirement investment plans that fall under ERISA. The states argue that the Biden rule was not created properly because the previous rule (enacted under the Trump administration) was, in their view, improperly invalidated:
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A group of Republican-led U.S. states has asked a federal judge in Texas to strike down a Biden administration rule allowing socially conscious investing by retirement plans, saying it will imperil Americans' retirement savings. Lawyers for the 25 states led by Utah and Texas said in a filing in Amarillo, Texas, federal court late Tuesday that the U.S. Department of Labor failed to justify its departure from a Trump-era rule that limited investing based on environmental, social and corporate governance (ESG) factors. The rule, which took effect Jan. 30, sets guidelines for ESG investing including requiring that socially conscious investments are still financially sound. The states sued in January and in February had asked the judge to temporarily block the rule pending the outcome of the case. The judge has not yet ruled on that bid, and in Tuesday's filing, the states asked the judge to rule on the merits of their lawsuit…. The Labor Department has said the Trump-era rule, which was criticized by business groups and the financial industry, failed to account for the positive impact that ESG investing can have on long-term returns. Business groups said the Trump administration rule was unnecessary and confusing for investment managers. The new rule covers plans that collectively invest $12 trillion on behalf of 150 million Americans.[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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