A group of 26 U.S. Republican states are set to appeal a Texas-based federal judge’s decision rejecting their challenge to a rule allowing employee retirement plans to consider ESG issues in investment decisions, according to news reports.
Led by state policymakers in Texas and Utah, the group filed a notice of appeal in federal court alongside oil and gas company Liberty Energy and a related trade group, after District Judge Matthew Kacsmaryk rejected their lawsuit on September 21, according to a recent Reuters report.
The U.S. Labor Department instated the rule allowing retirement plans to consider ESG factors last year, after President Donald Trump’s administration restricted ESG investing in 2020.
In March, Congress passed a Republican-backed resolution to repeal the rule, but President Joe Biden vetoed it.
In his rejection of the lawsuit, District Judge Kacsmaryk said that the proposed rule still requires financial factors to come first when asset managers make investment decisions and does not require or even encourage retirement plans to consider other factors, such as climate change and social and labor issues.
“Our coalition was deeply disappointed in the court’s ruling,” Utah Attorney General Sean Reyes said in a statement, “we look forward to our appeal prevailing.”