West Virginia and Louisiana state treasurers blasted President Joe Biden’s controversial Labor Department rule change which allows companies to prioritize Environmental, Social, and Governance (ESG) initiatives when choosing retirement plans — ultimately reversing a Trump-era rule.
Last week, the Labor Department announced the rules that would enable fund managers to prioritize ESG initiatives, a form of leftist activism in financial investing, when selecting which retirement investments to invest in and when they exercise shareholder rights, such as proxy voting.
“I’m extremely disappointed the Biden administration has rolled back President Trump’s rules that protected Americans’ retirement plans from unsound ESG investment practices,” West Virginia Treasurer Riley Moore said. “The ESG and socially responsible investment trends are nothing more than a marketing gimmick used by liberal activists and firms like BlackRock to prop up political allies and favored social initiatives.”
ESG policies are a form of leftist activism in financial investing that has become the latest vector to influence the way Wall Street financial firms and corporations continue to take social and political positions that do not relate to their business, such as stances associated with climate change, as well as the Diversity, Equity, and Inclusion (DEI) agenda.
Ultimately, after the rule comes into effect, it empowers managers to push these leftist ideas through unelected channels by considering something other than earning returns.
Given the political beliefs behind ESG investing, Moore explained that asset managers should strictly use objective financial metrics — which is what the Trump-era rule required — in their fiduciary decisions other than following the uncertain “political nature of ESG investing” and urged Congress to take a stance:
"The subjective, political nature of ESG investing trends could present tremendous harm to consumers looking for sound retirement options. The fact that now defunct crypto exchange FTX had higher ESG ratings than ExxonMobil exposes the clear flaws in this investing trend, and I’m worried Americans could be deceived into placing their retirement money into investment products that are promoted more for political factors than financial stability.
I hope Congress can step up and rein in this attempt to dupe Americans into using their retirement plans to fund woke social initiatives."
Louisiana State Treasurer John Schroder, chairman of the State Financial Officers Foundation (SFOF), also released a statement claiming the “Biden administration is attempting to pull a fast one on the American people by pushing the progressive ESG agenda through unelected channels like the Department of Labor.” He added:
"They’re going through DOL to install initiatives like the Green New Deal without the checks of the legislative process. Not only will the adoption of this rule prove devastating for hardworking American retirees, but it will also threaten America’s national security and energy interdependence forcing reliance abroad. American retirement dollars should be invested for the best return and profit, not to bolster social initiatives chosen at a whim by fund managers and their favorite bureaucrats.”
Moore and Schroder attended the State Financial Officers Foundation (SFOF) conference last month, where multiple state treasurers from across the country launched their strategy against ESG policies. The group launched a website, along with a video explainer, hoping to educate Americans on the dangers of ESG policies.
At the conference last month, multiple state treasurers explained to Breitbart News that ESG policies hurt each state differently but collectively financially hurt all American taxpayers. Hence, they came together in a joint effort to combat the left-wing policies masquerading in economics.