25 states hit Biden admin with climate action lawsuit targeting Americans’ retirement savings

FIRST ON FOX: A group of 25 states filed a federal lawsuit Thursday against the Biden administration, arguing that a recent rule allowing pension plan managers to consider environmental and social issues in investment decisions violates the law.

The lawsuit — led by Utah Attorney General Sean Reyes and joined by 24 other states, including Louisiana, Texas and Virginia — challenges a Department of Labor (DOL) rule unveiled in November that is expected to go into effect. effective January 30. The rule would open the door for fiduciaries to factor so-called environmental, social and governance (ESG) considerations into Americans’ retirement accounts, an action that states say could significantly harm clients’ financial interests.

“The Biden administration is promoting its climate change agenda by putting ordinary people’s retirement money at risk,” Reyes told FOX Business in a statement. “Americans are already suffering from the current economic downturn.”

“Allowing asset managers to funnel hard-working Americans’ money into ESG investing puts billions of dollars in retirement savings at risk in exchange for someone else’s political agenda,” he said. he continued. “We are taking urgent action on this matter as this illegal rule is due to come into effect next week. It must be stopped.”


Utah Attorney General Sean Reyes speaks during a news conference outside the Supreme Court in Washington, DC, U.S., Monday, Sept. 9, 2019. A group of 50 attorneys general have launched a sweeping investigation to find out whether Alphabet Inc.'s advertising practices violate antitrust laws.  Photographer: Andrew Harrer/Bloomberg via Getty Images

Utah Attorney General Sean Reyes speaks during a press conference outside the Supreme Court on September 9, 2019. (Andrew Harrer/Bloomberg via Getty Images/Getty Images)

The two dozen states filed the challenge in federal district court in Texas and asked the court for a preliminary injunction to stop the DOL from enforcing the rule until a decision has been made in the case. .

In the lawsuit, the states allege that the DOL violated the Employees Retirement Income Security Act (ERISA) of 1974. The law protects the retirement income of 152 million American workers, the equivalent of more than two-thirds of the country’s adult population, and covers approximately $12 trillion in assets.


States noted that ERISA requires that pension plan assets be held for the exclusive purpose of providing benefits to plan participants and that trustees must act solely in the interests of said participants. The Supreme Court has previously ruled that these “benefits” are defined as “financial benefits.”

After announcing the rule on Nov. 22, Labor Secretary Marty Walsh said the move would “help plan members get the most out of their retirement benefits.” DOL Assistant Secretary for Benefits Security Lisa Gomez added that climate change and ESG factors were important to investors.

Secretary of Labor Marty Walsh is pictured in Pennsylvania on June 2, 2021. (Tom Williams/CQ-Roll Call, Inc via Getty Images/Getty Images)

“This is about protecting retirees in Louisiana and across the country,” Louisiana Attorney General Jeff Landry told FOX Business. “Investments must be made using sound economic principles, not old-fashioned politics. These companies have a responsibility to invest with the best financial interests of their clients in mind rather than Biden’s disastrous agenda.”

Liberty Energy CEO Chris Wright, a private plaintiff in the case, added that his company is suing because the regulations “make it harder to protect the retirement security of our workers and hinder investment in our industry.” and its ability to provide reliable and affordable power to our communities.”

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

“For generations, federal law has required trustees to put the financial interests of their clients first, and I intend to fight the Biden administration in court to make sure they can’t put jeopardize the retirement savings of American workers,” he added.


In recent years, large asset managers and financial institutions have increasingly focused on prioritizing ESG factors when making key investment decisions. In particular, they aim to invest in companies based on the efforts of these companies to fight against climate change and reduce their carbon footprint.

Companies like BlackRock, State Street and Vanguard, which collectively manage trillions of dollars in assets, have been at the forefront of the ESG movement.

In response to the growing movement, Republican state attorneys general and financial officers have retaliated, rescinding contracts with the companies and threatening legal action over how they handle client investments.

“Everyday Americans are seeing their investment dollars used against them as those in power favor a political agenda over financial returns,” said Derek Kreifels, CEO of the State Financial Officers Foundation, a group that has organized state and local opposition to the ESG movement. FOX business. “It is actions like these attorneys general that will ensure that Americans are safe from investor-activists and progressive elites who prefer to focus on politics rather than upholding their fiduciary duty.”

“Leaders at the state level, from treasurers to attorneys general, are sending a message to Wall Street and the administrative state that we will refuse to allow the American people to be exploited and we will continue to fight to secure their hard-earned dollars are not being used to advance an agenda that goes against our values,” Kreifels said.


Will Hild, executive director of consumer group Consumers’ Research, also applauded the challenge, saying it was an important move against “the left’s woke agenda”.

“Attorney General Reyes is leading the way, highlighting how dangerous ESG is and why it’s important for states to stop (BlackRock CEO) Larry Fink and his elitist ESG friends from playing politics with investments and retirements of hard-working Americans,” Hild told FOX Business.

“As America’s oldest consumer protection agency, we will continue to support state officials in their efforts to protect the American people from the dangers of ESG and corporations that choose politics over profit.”

Besides Utah, Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming all joined the lawsuit against the administration .

The Department of Labor did not immediately respond to a request for comment.