Rule Letting Retirement Fund Managers Consider ESG Factors to Take Effect Despite Red States’ Lawsuit

by Ronn Blitzer, FOXBusiness

Commencing on January 31, 2023, retirement plan managers are able to factor in a company’s environmental, social, and governing (ESG) positions when making investment decisions, as a Biden administration rule goes into effect – despite the objection of 25 Republican-led states.

The Department of Labor rule, first announced in November, reverses restrictions put in place under the Trump administration. It is now facing a lawsuit from Utah and two-dozen other states, who argue that it violates the Employee Retirement Income Security Act (ERISA) of 1974, which says retirement plan assets must be held for the exclusive purpose of providing benefits to participants in the plan, and that fiduciaries must act solely in the participants’ interests.

The GOP-led states say that by focusing on social and political agendas, plan managers will be compromising the growth potential of participants’ accounts.

“Permitting asset managers to direct hard-working Americans’ money to 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, saying the rule “must be stopped.”

The lawsuit was filed on January 26 in federal court in Texas. The court has yet to issue a ruling on the request for an injunction. If granted, the rule would be blocked for the duration of the case, depending on any subsequent appeal.

Over the past few years, massive asset managers and financial institutions have increasingly focused on prioritizing ESG factors when making key investment decisions. They have particularly set their sights on investing in companies based on those companies’ efforts to combat climate change and curb their carbon footprints.

Companies like BlackRock, State Street, and Vanguard, which collectively manage trillions of dollars in assets, have taken lead roles in the ESG movement. In response to the growing movement, Republican state attorneys general and financial officers have fought back, canceling contracts with the firms and threatening legal action over how they handle customers’ investments.

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 make the most of their retirement benefits.”

Republicans, however, believe it does more to advance the Biden administration’s green agenda than help investors handle their retirement savings.

“This rule is an affront to every American concerned about their retirement account,” Texas Attorney General Ken Paxton said in a statement to FOX Business. “The fact that the Biden Administration is now opting to risk the financial security of working-class Americans to advance a woke political agenda is insulting and illegal.”

Fox Business’ Thomas Catenacci contributed to this report. ▫

Lemon Grass Beef With Avocado

Ingredients:

1/2 cup low-fat sesame-ginger salad dressing

2 tablespoons refrigerated fresh lemon grass paste

2 tablespoons bottled Korean sweet sesame red chili sauce

1 flank beef steak (about 1 pound)

3 teaspoons garlic-flavored olive oil, divided

1 1/2 cups sweet mini peppers (orange, yellow, red) cut into 3/4-inch pieces

2 fresh California Avocados, peeled and cut into 1/2-ich cubes

1/2 cup coarsely chopped Italian parsley

Directions:

Combine dressing, lemon grass paste and red chili sauce in small bowl.

Cut beef steak lengthwise in half, then crosswise into 1/4-inch thick strips. Place beef and 1/2 cup dressing mixture in medium bowl; mix well.

Heat 1 teaspoon oil in large nonstick skillet over medium-high heat until hot. Add half of beef; stir-fry 1 to 2 minutes or until outside surface of beef is no longer pink. Remove from skillet. Repeat with 1 teaspoon oil and remaining beef. Remove from skillet; keep warm.

Meanwhile, heat remaining oil in same skillet over medium-high heat until hot. Add peppers; stir-fry 2 minutes or until crisp-tender, stirring frequently.

Combine cooked beef, peppers, avocados, parsley and remaining dressing mixture in large bowl; mix lightly but thoroughly.

Nutrition information per serving: 464 Calories; 31g Total Fat; 6g Saturated Fat; 15g Monounsaturated Fat; 66mg Cholesterol; 433mg Sodium; 20g Total carbohydrate; 27g Protein; 3.2mg Iron; 9.3mg Niacin; 0.9mg Vitamin B6; 109.7mg Choline; 1.4mcg Vitamin B12; 5.3mg Zinc; 27.6mcg Selenium; 9g Fiber.