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Sean D. Reyes
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AG Reyes Leads 27-State Letter Asking Congress to Stop ESG Investing with Retirement Funds 

February 14, 2023

Today, Utah Attorney General Sean D. Reyes led a 27-state letter to U.S. Senate and House leaders, asking they exercise Congressional Review Act authority to stop Environmental Social Governance (ESG) investing with Americans’ retirement savings. The attorneys general also filed a lawsuit over the 2022 rule in January and are asking Congressional leaders to oppose it separately.   

The illegal Department of Labor rule, titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” 87 Fed. Reg. 73822 (Dec. 1, 2022), permits asset managers to place retirement savings at risk by using them to advance political agendas. 

From the letter: “Not only are these practices problematic for using people’s retirement savings to advance causes they disagree with, but ‘multiple studies’ have found that ‘ESG investing’ reduces returns. ‘Over the past five years, global ESG funds have underperformed the broader market by more than 250 basis points per year, an average 6.3% return compared with an 8.9% return. This means an investor who put $10,000 into an average global ESG fund in 2017 would have about $13,500 today, compared with $15,250 if invested in the broader market.’” ERISA protects the retirement savings of over 152 million workers and $12 trillion in assets—the rule instead threatens the financial security of Americans.  

The letter also highlights why the DOL rule is unlawful as it contradicts the Employee Retirement Income Security Act, (ERISA), violates the Administrative Procedure Act, and constitutes executive overreach.  

The attorneys general are asking for prompt action, as Congress only has 60 days to disapprove of the rule. 

Read the letter to Congress here.  

Read the complaint filed in January here.