Attorney generals urge Congress to reject attempts to overturn DOL ESG rule

Letter says overturning rule will 'strain the ability of Americans to responsibly and smartly invest'

A coalition of 21 state attorney generals are calling on the Senate and House of Representatives to overturn the block on the Department of Labor’s (DOL) ESG rule, calling it “the latest in a years-long campaign to obscure these facts” about climate change.

In a letter sent to Congress, attorneys general asserted that the DOL rule helps fiduciaries make investment decisions that better address the long-term investment horizons of the employees they represent by allowing them to consider ESG factors, particularly the costs and impacts of climate change.

“Thousands of Americans trust their 401(k)s or other retirement accounts to keep their future safe and bring them peace of mind,” said attorney general Rob Bonta, who led the coalition.

“They deserve to have investment managers armed with all the information needed to make smart decisions about their money. The fact is the costs of climate change are only going to rise. Ignoring or denying its impact will only put investors at a disadvantage. I urge Congress to reject any attempts to overturn this vital rule, which empowers those managing everyday Americans’ retirement savings to make decisions with those risks in mind.”

The DOL rule, which allows plan fiduciaries to consider ESG factors when selecting investments, was blocked in the Senate by 50-46 votes earlier this month, with senators saying it was “politiciz[ing] millions of Americans’ retirement investments to favor Biden’s ideological preferences rather than getting the best returns for Americans.”

Nevada attorney general Aaron Ford, who supported the letter to Congress, said: “Attacks on ESG factors are obviously politically motivated and, if successful, will strain the ability of Americans to responsibly and smartly invest.

“Good investing practices should not be turned into the next front of a manufactured culture war. Allowing the free flow of information in connection with investing processes is consistent with the pillars of responsible capitalism.”

The letter was sent to senators Bernie Sanders and Bill Cassidy, chair and ranking member respectively of the senate health, education, labor, and pension committee, and representatives Virginia Foxx and Bobby Scott, chair and ranking member respectively of the house education and the workforce committee. 

It said the relevance of ESG factors is investment is supported by strong data and highlighted the fact that during the 60-day public comment period before the rule was finalized, more than 97% of stakeholders supported the DOL proposal.

In submitting the letter, attorney general Bonta was joined by the attorneys general of Arizona, Connecticut, the District of Columbia, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, North Carolina, New Jersey, New Mexico, Nevada, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.