LINCOLN — Nebraska joins 24 other red states in a lawsuit seeking to block a new rule that claims it will free up 401,000 administrators to invest in so-called “environmental, social and governance” funds. .
According to a press release from the Nebraska Attorney General’s Office, the state will allow the U.S. Department of Labor to recognize its They claim that they have exceeded their authority.
ERISA violation
“Contrary to Congress’ explicit intentions, these changes make it easier for trustees to act with a variety of motives. They also make it harder for beneficiaries to police such conduct,” the lawsuit said. It argues that the rule violates the Employee Retirement Income Security Act of 1974 (ERISA).
ESG investing, or considering a company’s environmental, social, and governance policies, has been criticized by conservative groups and politicians as going against the investment goal of maximizing returns. Others advocate the importance of considering factors such as climate change and diversity policies in determining the future success of investments.
Last month, former Nebraska Attorney General Doug Peterson called ESG investing “dangerous” and a “threat to our democratic form of government” as it seeks to impose UN sustainability goals. issued a report warning state investment officials that there is. About US companies.
“Political Theater”
Two professors at the University of Nebraska Law School called Peterson’s report a “political drama,” with a downplay of law and complex topics and an emphasis on “international conspiracies.”
However, Attorney General Mike Hilgers has recognized ESG concerns and joined a new lawsuit led by Utah Attorney General Sean Reyes.
It has also caught the attention of conservative state senators.
Earlier this month, Sterling Sen. Julie Surama, chairman of the state’s Banking, Commerce and Insurance Committee, said the funds deposited by the Nebraska Treasurer were “used by financial institutions for social or political causes or Purpose.”
Nebraska Treasurer John Murante attacked ESG as part of the National Association.
Omaha freshman Senator Kathleen Coutt also introduced a longer and broader ESG proposal, LB 743, the Investment Neutrality Act in Public Funds.
ESG briefing schedule
ESG is also the topic of the Nebraska Investment Council, which manages approximately $40 billion in state retirement and trust funds.
In July, the Council was briefed on ESG by BlackRock, the world’s largest asset manager. At the time, it was described as an educational presentation.
Follow-up discussions with BlackRock, Vanguard and Institutional Shareholder Services are scheduled at the Council’s next meeting on February 9.
The other 24 states in litigation, other than Nebraska, are Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Hampshire, North Dakota, Ohio, and South Carolina. , Tennessee, Texas, Utah, Virginia, West Virginia, Wyoming.
