Previously, we wrote about a legal challenge brought by various Republican Attorneys General (AGs) to the Department of Labor’s new ESG Investing Rule. The litigation appeared to be dead on arrival as the Texas trial court upheld the rule, but an appeal was expected. Undeterred by their loss at the trial level, the AGs now seek to bring the issue before the Fifth Circuit Court of Appeals. The National Association of Plan Advisors covered the appeal in a recent post stating that:
“The coalition that brought the suit in January 2023, alleged that the 2022 Rule ‘undermines key protections for retirement savings of 152 million workers—approximately two-thirds of the U.S. adult population and totaling $12 trillion in assets—in the name of promoting environmental, social, and governance (‘ESG’) factors in investing, including the Biden Administration’s stated desire to address climate change.’”
The result of this appeal could either breathe new life into the anti-ESG movement’s investment litigation or be a final nail in its coffin. The Fifth Circuit is one of the most conservative appeals courts in the country. If there is any place where anti-ESG investment litigation could prevail, this would be it. That means that if the appeal faces failure at this stage, the anti-ESG movement should rethink its litigation strategy.
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