On behalf of two plaintiffs, both retirement account participants, Wisconsin Institute for Law & Liberty filed suit in February against the U.S. Secretary of Labor after the federal announced a new rule permitting the use of ESG in retirement investing.
The three-letter phrase stands for Environmental, Social, and Governance. The stated goal is to apply those principles to business and finance, but the problem is all three pillars bow to politically-driven, left-wing goals, such as avoiding investments in Big Oil to save the planet from climate change.
The press release from the Biden-led U.S. Department of Labor, in fact, cites climate change as an example for why ESG is beneficial. The federal agency amazingly claims the new rule will make workers’ retirement savings and pension plans “more resilient,” when the opposite is true since workers will likely suffer from left-wing ideology overtaking financial decisions.
That is why the Trump administration banned managers of retirement plans from considering factors such as climate change when making investment choices. The new rule overturns that action.
Wisconsin Institute claims the rule, implemented late last year, violates the Employment Retirement Income Security Act of 1974, which protects retirement accounts from mismanagement and from abuse.
On Monday, President Biden vetoed a measure passed in Congress to overturn the Department of Labor rule.
Kate Spitz, associate counsel at Wisconsin Institute, tells AFN the President’s veto means the lawsuit will continue on behalf of the two plaintiffs.
“The President's action not only ignores the bipartisan will of Congress, and circumvents its action,” Spitz says, “but jeopardizes the financial security of over 140 million Americans by injecting partisan issues, such as climate change and DEI initiatives, into their retirement investments."
