POLITICS + GOVERNMENT

Utah leading a lawsuit against new ESG rule affecting 401(k) plans

Jan 27, 2023, 11:52 AM

With 24 other states on board, the Utah Attorney General announced on Friday a lawsuit against a De...

The door of the Utah Attorney General ’s office is pictured at the Capitol in Salt Lake City on Wednesday, Jan. 25, 2023. (Laura Seitz, Deseret News)

(Laura Seitz, Deseret News)

SALT LAKE CITY — With 24 other states on board, the Utah attorney general announced on Friday a lawsuit against a Department of Labor rule. The new rule involves ESG (environmental, social and governance) investing, which the AG said would impact millions of 401(k) plans.

The “prudence and loyalty in selecting plan investments and exercising shareholder rights” rule will take effect Monday (Jan. 30, 2023). It is included along with other amendments to the Employee Retirement Income Security Act of 1974 (ERISA). 

Utah Attorney General Sean Reyes said the new rule in question allows 401(k) managers to put their clients’ money into ESG investments.

AG lawsuit involves ESG investing

According to Nerdwallet, ESG investing means that money managers make investment decisions based in part on whether a potential investment company addresses issues like carbon emissions and pollution in its business decisions. 

“The Biden administration is promoting its climate-change agenda by putting everyday people’s retirement money at risk,” said Reyes in a press release.

“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,” Reyes said.

He believes the new rule could put 401(k) assets at risk by using non-monetary benefits (such as pollution awareness) to make investment decisions.

According to Lexology.com, in May 2021, President Joe Biden used an executive order to direct federal agencies to “review and assess climate risks posed on the U.S. financial system.” This reportedly prompted a new focus by federal regulators on ESG-related regulatory issues.

Besides Utah, the 25 states joining this lawsuit are Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Ohio, South Carolina, North Dakota, Tennessee, Texas, Virginia, West Virginia and Wyoming.

Other reading:

 

 

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Politics + Government

none of the above voters dislike both president biden, pictured left, and former president trump, p...

Simone Seikaly

There’s probably more “none of the above” voters than we know

A 'none of the above' voter doesn't like any of the candidates running for the U.S. presidency. Right now 20% of U.S. voters feel this way.

6 hours ago

Former US President and current GOP Presidential candidate Donald Trump...

MICHAEL R. SISAK, Associated Press

Trump’s lawyers say it is impossible for him to post bond covering $454 million civil fraud judgment

Trump's lawyers said “obtaining an appeal bond in the full amount” of the judgment “is not possible under the circumstances presented."

6 hours ago

us capitol shown, government shutdown deadline approaching...

Lauren Fox, Clare Foran and Manu Raju, CNN

Border policy a key sticking point in Congress with shutdown deadline just days away

While government operations would halt if funding is not approved in time, the damage would be minimal if a shutdown is relegated to the weekend.

6 hours ago

supreme court shown, social media decision...

MARK SHERMAN, Associated Press

Supreme Court seems favorable to Biden administration over efforts to combat social media posts

The case Monday was among several the court is considering that affect social media companies in the context of free speech.

7 hours ago

Sen Curtis Bramble, R-Provo, speaks during a Senate Business and Labor Committee meeting at the Cap...

Dan Bammes

Utahn who’s served 24 years in the legislature, is stepping down

Bramble will serve through Dec. 31, 2024, said the deputy chief of staff for the Utah Senate. He will not run for re-election.

7 hours ago

FILE - The TikTok app logo appears in Tokyo, on Sept. 28, 2020. US lawmakers are concerned about Be...

Laura He, CNN

Analysis: Is TikTok really Chinese?

U.S. lawmakers say they worry TikTok could share data with the Chinese government, what is the evidence that supports these concerns?

12 hours ago

Sponsored Articles

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

silhouette of a family looking over a lake with a bird in the top corner flying...

Bear Lake Convention and Visitors Bureau

8 Fun Activities To Do in Bear Lake Without Getting in the Water

Bear Lake offers plenty of activities for the whole family to enjoy without having to get in the water. Catch 8 of our favorite activities.

Wellsville Mountains in the spring with a pond in the foreground...

Wasatch Property Management

Advantages of Renting Over Owning a Home

Renting allows you to enjoy luxury amenities and low maintenance without the long-term commitment and responsibilities of owning a home.

Clouds over a red rock vista in Hurricane, Utah...

Wasatch Property Management

Why Southern Utah is a Retirement Paradise

Retirement in southern Utah offers plenty of cultural and recreational opportunities. Find out all that this region has to offer.

Utah leading a lawsuit against new ESG rule affecting 401(k) plans