Nebraska Attorney General Joins 24 Other States in Trying to Block ESG Investment Rule
LINCOLN, Nebraska (Nebraska Examiner) — Nebraska has joined 24 other red states in a lawsuit seeking to block a new rule they claim frees up 401,000 managers to invest in so-called “environmental, social and governance” funds.
According to a press release from the Nebraska Attorney General’s office, states allege the US Department of Labor is overstepping its authority by passing a rule that allows fiduciaries to consider and promote “intangible benefits” when making investment decisions.
Violates ERISA
“Contrary to the clear intent of Congress, these changes make it easier for fiduciaries with mixed motives to act. They also make it harder for beneficiaries to control such behavior,” the lawsuit says, alleging that this rule is a violation of the Employee Retirement Security Act of 1974 (ERISA).
Nebraska Attorney General Mike Hilgers (Courtesy of Nebraska Attorney General)
Investing in ESG, or taking into account a company’s environmental, social, and governance policies, has been criticized by conservative groups and politicians as “awake” and contrary to the goal of investing, which is to maximize profits. Others advocate the importance of looking at things like climate change and diversity politics when evaluating the future success of an investment.
Last month, before leaving office, former Nebraska Attorney General Doug Peterson released a report warning public investment officials of ESG investments as “dangerous” and “threatening our democratic form of government” as they seek to impose United Nations sustainable development goals. Nations. on American companies.
‘Political theater’
Two professors at the University of Nebraska College of Law picked up Peterson’s report, calling it “political theater” and touching little on the law and a complex topic, but a lot on “international conspiracy”.
New Attorney General Mike Hilgers has caught on to concerns about ESG and has joined a new lawsuit being led by Utah Attorney General Sean Reyes.
State Senator Julie Slama of Sterling (Courtesy of the Unicameral Information Office)
It also caught the attention of conservative state senators.
Earlier this month, State Senator Julie Slama of Sterling, who chairs the Legislative Assembly’s Committee on Banking, Commerce and Insurance, introduced Bill 67, which would ensure that funds deposited by the Treasurer of Nebraska “are not used by financial institutions for social or political purposes.” reasons or purposes.
State treasurer John Murante, as a member of the national association, attacked the ESG.
Freshman Senator Kathleen Caut of Omaha also introduced a much longer and broader ESG proposal, LB 743, “Public Fund Investment Neutrality Act.”
ESG presentation planned
ESG has also been a topic for the Nebraska Investment Board, which manages about $40 billion in public pension and trust funds.
In July, the board received a briefing from BlackRock, the world’s largest money manager, about ESG. It was described at the time as an educational presentation.
Follow-up discussions with BlackRock, Vanguard and Institutional Shareholder Services are scheduled for the next board meeting on February 9th.
The lawsuit involves 24 states, in addition to Nebraska: Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Hampshire, North Dakota, Ohio, South Carolina. , Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming.
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