West Virginia Attorney General Patrick Morrisey has joined a major coalition of 25 states in suing Biden’s Department of Labor over a recently issued rule governing certain investment practices.
The coalition said the 2022 Investment Rule (Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights) pushes a woke, left-wing agenda that inappropriately promotes environmental, social and governance (ESG) initiative, irrationally contradicts the 2020 Investment Rule and offends the Employee Retirement Income Security Act.
The new rule becomes effective Jan. 30. At stake is the retirement security for tens of millions of Americans.
“The Biden administration will stop at nothing to further their woke climate agenda and so-called diversity measures at the expense of pension holders’ bottom line–and in likely violation of pension fund managers’ fiduciary duties,” Attorney General Morrisey said. “We will vigorously fight this and all regulatory overreach as this administration tries to establish rules to advance their woke agenda.”
Preceding the lawsuit was a letter Attorney General Morrisey and 22 other states sent to the DOL in December 2021 raising concerns about the rule. The coalition urged DOL’s Employee Benefits Security Administration not to adopt the rule because it encourages and “may in fact” require fund managers to consider ESG factors when making decisions about where and how to invest.
The rule “would allow employers and investment managers to invest employee retirement savings in a way that benefits social causes and corporate goals even if it adversely affects the return to the employee.”
And by “allowing employers and investment managers to consider ESG factors,” the DOL turns “what should be a financial decision into a political one.”
“Investment managers should only look at the economic value of the investment, not whether it advances this administration’s leftwing woke climate change agenda,” Attorney General Morrisey said. “The Biden administration can try to spin this any which way to support their narrative, but this is plain and simple: they are circumventing Congress and pushing backdoor liberal policies to take hostage the pension funds of millions of hard working Americans, all to advance their ESG agenda.”
Studies have shown that ESG investing not only costs pension holders more but it leads to lower returns, according to a December 2021 letter sent to the DOL by the National Center for Public Policy Research’s Free Enterprise Project.
Attorney General Morrisey continues to be front and center in taking other actions against ESG practices. He has led coalitions in challenging proposals from the Securities and Exchange Commission to saddle American businesses with crippling ESG-related disclosure requirements.
He also fought back against the Commodities Futures Trading Commission and bank regulators when they proposed to do much the same.
He has also joined a major coalition in writing a letter to BlackRock Inc., urging the financial firm to “come clean on whether it actually values our states’ most valuable stakeholders, our current and future retirees, or risk losses even more significant than those caused by BlackRock’s quixotic climate agenda.”
Recently, he joined a 21-state coalition in writing a letter to two of the nation’s largest proxy advisory firms— Institutional Shareholder Services and Glass Lewis & Co.— raising concerns with how ESG considerations affect the firms’ proxy voting recommendations and conflict with the financial interests of their clients.
Attorney General Morrisey joined the Utah-led lawsuit with attorneys general from Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Idaho, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, Tennessee, Texas, Virginia and Wyoming.
Original source can be found here.
