SALT LAKE CITY (ABC4) –On Feb. 14, Attorney General Sean D. Reyes (R-Utah) sent a 27-state letter to U.S. Senate and House leaders, asking them to stop using Americans’ retirement savings to invest in environmental, social, and governance policies.
Senator Mitt Romney (R-Utah), along with other Utah senators also sent in a resolution of disapproval of Biden’s ESG rule.
In November of last year, President Biden instituted the rule, which Reyes and many others oppose, that permits Employee Retirement Income Security Act retirement plan fiduciaries to consider ESG factors when selecting investments and exercising shareholder rights.
“Americans’ retirement savings are now threatened as hundreds of asset managers have committed to prioritize environmental, social, and governance (ESG) policies over workers’ financial interests,” Reyes’s letter stated.
He asked them to exercise Congressional Review Act authority to stop this investment.
“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.”
The letter stated that over the past five years, global ESG funds have underperformed the broader market by more than 250 basis points per year. That means an average of 6.3% return compared with an 8.9% return.
“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 [they] invested in the broader market.”
The attorneys general also filed a lawsuit over the 2022 rule in January and asked Congressional leaders to oppose it separately. Sen. Romney, and all 48 of his Republican colleagues, are doing just that, with their resolution of disapproval.
“Hundreds of millions of Americans’ retirement funds have taken a hit in our current economy,” Sen. Romney said. “The Biden Administration’s recent ESG rule would pose further risk to these retirement funds by forcing fiduciaries to use Americans’ hard-earned money to advance social causes rather than investing to get the best returns. Americans’ retirement is not something to play political games with.”
The attorneys general are asking for prompt action, as Congress has less than 60 days to disapprove of the rule.