Republicans ask Congress to block ESG rule

Republicans ask Congress to block ESG rule

A group of 27 Republican state Attorneys General have reportedly published a letter to Congressional leaders aimed at blocking the implementation of an ESG investing rule.

Their goal is to stop a Department of Labor law that allows the consideration of climate and ESG factors in private employer-sponsored retirement plans (ERISA), according to a report from ESG today.

In the letter, it claims the retirement savings of Americans are being threatened by asset managers “using their ownership stake in public companies to pressure them to comply with woke environmental and social agendas,” it said.

This letter comes shortly after a lawsuit, backed by 25 Attorneys General from Republican-leaning US states, against the Biden administration seeking to prevent the rule’s implementation.

The ESG ruling would allow fund managers for ERISA plans to include ESG considerations in the investment process, and allow climate and ESG factors to be considered by fiduciaries when exercising shareholder rights.

This is just the latest in several efforts from the Republican party to prevent ESG factors influencing the financial market. Last week, Governor of Florida Ron DeSantis barred fund managers for state and local entities in the state from considering ESG factors in investment decisions.

Last year, DeSantis also barred fund managers for state pension funds from incorporating ESG factors in the investment process.

There are many other anti-ESG measures being taken across the USA, which have targeted large financial institutions, law firms and advisory firms.

While the Republicans are fighting for anti-ESG initiatives, the Democrats are taking the other line. Arizona recently ended investigations into ESG practices, removing a policy implemented by the former Republican administration.

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