THE AMERICA ONE NEWS
May 29, 2024  |  
0
 | Remer,MN
Sponsor:  QWIKET.COM 
Sponsor:  QWIKET.COM 
Sponsor:  QWIKET.COM 
Sponsor:  QWIKET.COM Sports Media Index – Perfect for Fantasy Sports Fans.
Sponsor:  QWIKET.COM Sports Media Index – Perfect for Fantasy Sports Fans. Track media mentions of your fantasy team.
back  
topic
Cami Mondeaux, Congressional Reporter


NextImg:GOP attorneys general threaten legal action to companies who prioritize ESG invesments

A group of Republican attorneys general sent a letter to more than 50 of the country’s largest asset managers to warn against prioritizing environmental, social, and governance factors when making investment decisions.

The letter cites concerns that companies will begin making politically motivated investment decisions rather than those that are in the best interest of their clients if they choose to prioritize climate factors, also known as ESG. The group of 21 Republican attorneys general warned that doing so would violate current law, threatening possible legal action if companies do not comply.

HOUSE FAILS TO OVERRIDE BIDEN VETO OF ESG LEGISLATION

“You are not the same as political or social activists and you should not be allowing the vast savings entrusted to you to be commandeered by activists to advance non-financial goals,” the group wrote.

The 21-page letter outlines several legal concerns posed by ESG investments, which the group argues violates the asset managers’ duties laid out under state and federal law. The attorneys argued that asset managers are bound by law to provide investment advice that is “in the best interest of its client” — contending that advice encouraging ESG investments would be politically based.

The warning comes after President Joe Biden vetoed a Republican-led bill seeking to repeal a Department of Labor rule that allows retirement fund managers to consider ESG principles when making investment decisions. Republicans criticized that rule, with many decrying it as “woke capitalism.”

The Labor rule in question does not require investment managers to consider ESG factors, but it allows fiduciaries for private companies to take those principles into account when making investment decisions.

The group of attorneys general voiced concerns that the rule would pose conflicts for investment managers as they would need to choose between their legal duties focused on getting their clients the largest financial return possible and the policy goals of ESG activists.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

“Voting for [a] transparently political proposal … would demonstrate plainly that you are more concerned about political goals than maximizing financial returns for investors,” the group warned.

The letter follows a federal lawsuit filed in January that challenges the Labor Department rule, which has been backed by 25 states, including Texas and Montana. That case is still pending in federal court.