Republicans Attack ‘Illegal’ DoL ESG Rule
Attorneys general have written to the Senate and House urging them to reject the proposed law permitting ESG considerations in retirement plans
- Written by Banking Exchange staff
Republican lawmakers have launched a fresh attack on the legality of rules governing ESG investing.
Last week, a group of attorneys general from 27 states wrote to the leaders of the Senate and House of Representatives claiming that the Department of Labor’s rule permitting ESG investments in retirement plans was “illegal”.
The rule also “threatens the financial stability of millions of Americans and blatantly violates federal law”, the attorneys general argued.
They claimed that asset managers were prioritizing ESG considerations “over workers’ financial interests”, for example by supporting shareholder resolutions forcing companies to reduce greenhouse gas emissions “even when doing so harms the company’s financial viability”.
The letter is the latest in a string of attacks on ESG investing by primarily Republican politicians and lawmakers.
A similar letter earlier this month from a group of Republican attorneys general challenged President Biden’s proposed rule change to require all federal suppliers above a certain threshold to report emissions. The largest federal contractors would also have to outline emissions reduction targets.
However, the attorneys general argued the rule would have a negative economic impact on states with large fossil fuel industries. The American Bankers Association also opposed the plan, arguing it would create unnecessary burdens on businesses and confuse investors.
State and local public bodies in Florida are set to be banned from doing business with fund managers that consider ESG factors in their processes, according to a new law proposed by Governor Ron DeSantis. Government entities in the state would also be banned from requesting ESG-related information from suppliers during the procurement process.
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