January 30, 2023

(Anchorage, AK) Alaska Attorney General Treg Taylor joined 24 states in a lawsuit against the Biden Administration to stop a new U.S. Department of Labor rule that pushes ESG (Environmental, Social, and Governance) investing, which may risk the retirement savings of some two-thirds of the U.S. population or 152 million workers.

The Department of Labor, (DOL), rule authorizes fiduciaries to consider nonfinancial factors when administering trust assets, switching investment focus on advancing an ESG agenda instead of achieving long-term financial stability for their clients. Beyond being detrimental to the retirement accounts of hardworking Americans, the rule is fundamentally unlawful, as well as arbitrary and capricious. It violates both the Employee Retirement Income Security Act of 1974 (“ERISA”), which was created to protect retirement assets, and the Administrative Procedure Act. The DOL has also departed from prior policy, as its 2020 rule required that financial factors take precedence over nonfinancial or nonpecuniary factors.

ESG investing is an investment strategy that emphasizes a firm’s governance structure or the environmental or social impacts of the firm’s products or practices. The Attorney General for Texas is leading the complaint.

“For generations, federal law has required that fiduciaries place their clients’ financial interests at the forefront,” said Alaska Attorney General Treg Taylor. “This new federal rule allows a fiduciary to use ESG factors as a screen to refrain from investments that would otherwise be in the financial best interest of retirement funds, putting Americans’ retirement funds second to ESG.”

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Department Media Contacts: Communications Director Patty Sullivan at patty.sullivan@alaska.gov or (907) 269-6368. Information Officer Sam Curtis at sam.curtis@alaska.gov or (907) 269-6379.