Labor Department Defends Pro-ESG 401(K) Rule in Fifth Circuit

The Biden administration’s ESG-friendly 401(k) rule is consistent with retirement investing law, the US Labor Department said in its first formal response to a red state-led appeal challenging the 2022 regulation.

A federal judge in Texas was right last year to uphold the environmental, social, and governance 401(k) investing regulation from DOL’s Employee Benefits Security Administration, the department told the US Court of Appeals for the Fifth Circuit Thursday.

More than two dozen Republican state attorneys general who had sued DOL to block the rule appealed the Texas judge’s decision to the Fifth Circuit in October.

The regulation gives retirement ...