AUSTIN – Attorney General Ken Paxton has joined a multistate amicus brief, led by Utah, opposing the Department of Labor’s support for Environmental, Social and Governance (ESG) management of pension funds that are administered under the terms of the Employee Retirement Income Security Act (ERISA). ERISA is a federal law that establishes the basic standards and protections for private sector retirement and health plans.  

The most important issue for ERISA-controlled investment managers and employer sponsors who encourage employees to invest their retirement funds should be to support investment decisions that are in the employees’ best financial interests. The problem with ESG investing is that it elevates the fund managers’ or employer’s political and/or ideological commitments above the employees’ financial goals and desires. Additionally, evidence is lacking regarding how ESG-based investment portfolios will perform over time. The Department of Labor’s proposed rule thus represents a risk to employees’ financial future, particularly during a time of economic uncertainty.   

To read comment letter click here.