The U.S. Department of Labor released a final rule last month that could have a major impact on how retirement plan fiduciaries interact with environmental, social, and governance (ESG) factors. The Labor Department’s new action takes a clear side in the ongoing debate about political activism in retirement funds, explicitly allowing ESG to be included in what is considered within a fiduciary’s scope of responsibility under the Employee Retirement Income Security Act (ERISA).
According to Department of Labor (DOL) statements, the rule “removed barriers to considering [ESG] factors in plan investments” and will provide more flexibility in “exercising shareholder rights.”
But
