Utah sues National Association of Attorneys General over ESG funds

This legal action by Utah came after it was revealed that NAAG is investing in political schemes like ESG.

Published: March 7, 2023 5:50pm

Updated: March 8, 2023 6:19am

(The Center Square) -

Utah Attorney General Sean Reyes is taking action against the National Association of Attorneys General.

Reyes filed a lawsuit against the NAAG over its investment of public money into ESG funds. According to Investopedia, ESG or Environmental, Social, and Governance (ESG) investing "refers to a set of standards that socially conscious investors use to screen investments."

Critics says ESG investments put financial returns behind political considerations.

This legal action by Utah came after it was revealed that NAAG is investing in political schemes like ESG, and Montana AG Knudsen and the Arizona state legislature sent litigation hold notices to NAAG over their ESG investments.

The lawsuit Reyes filed is addressed to NAAG Chief Financial Officer Theresia Heller and says that NAAG cannot be trusted with the money of Utah taxpayers.

“Beyond that, the Attorneys General of Idaho and Kansas have written to NAAG expressing ‘serious concern’ about whether NAAG holds or invests public money ‘in ESG-oriented funds,’ and asking NAAG ‘to disclose its’ specific ‘investments and financial products’ so its members could learn for the first time whether those concerns were well founded…” Reyes wrote. “In response, NAAG’s executive director gave a list of NAAG’s investments to the Kansas Attorney General and said that the list contains ‘no mention of ESG or any other consideration not consistent with the uniform prudent investor rule.’ But outside observers have noted that ‘line items in the fund clearly show investment in ESG-oriented entities like Blackrock and DFA Emerging Markets Social Core Equity Fund.’”

“These conflicting answers raise concerns about NAAG’s investments that are identical to the concerns that caused Utah State Treasurer Oaks to move $100 million in public funds from an investment firm,” he added.

Reyes received praise from Will Hild, Executive Director of Consumers’ Research, and O.H. Skinner, Executive Director of Alliance for Consumers for taking this action.

Hild said that society needs more politicians like Reyes to take action against ESGs.

"I applaud Attorney General Reyes for taking legal action against NAAG, which continues to put politics over consumers by investing in ESG,” Hild said in a statement. “Utah is practicing good governance by standing up for consumers and not letting the ESG elites dictate American policy. Leaders like Reyes are on the front lines of the battle against the progressive's political investment charade, and Consumers' Research will continue to offer our full support in the fight to end woke capitalism.”

Meanwhile, Skinner said his organization will stand with Reyes in his efforts against ESGs.

"Kudos to Attorney General Reyes for going to court over the money at NAAG, putting his state and his consumers first. NAAG has a track record of playing money games, including taking money from consumer settlements, investing that money in ESG-linked investments, and engaging in other questionable financial behavior,” Skinner said in a statement. “We’ve made it our mission to call out this behavior, and we stand ready to support Attorney General Reyes and any other Attorneys General who take action like this. We will not stop until the money at NAAG goes back where it belongs.”

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