In a Reuters article, partners Elizabeth Goldberg and Lance Dial and associate Rachel Mann wrote about recent rulemaking from the US Department of Labor (DOL) that may impact how fiduciaries and other stakeholders approach environmental, social, and governance (ESG)-related investments. The DOL’s proposed rule "Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” as well as the agency’s request for input on ways climate change may affect the retirement industry, could prompt the DOL to take additional action related to ESG investment.
“At a minimum, the DOL's rulemaking in this area could impact in-house ERISA fiduciaries that make investment decisions (e.g., in-house fiduciary committees) — even if the plan does not include an ESG-themed fund,” they shared. “In addition, the DOL's action could impact investment consultants and asset managers — even if the asset pool in question is not ESG-specific. Finally, other service providers, such as recordkeepers and auditors, may be impacted by DOL action in this area.”