US Department of Labor Proposes Rule To Remove Barriers To Considering ESG Factors in Pension Plans

The Department of Labor’s explicit mention of government regulations could encourage more pensions to adopt ESG

• The suggested rule states that plans sponsors under the Employee Retirement Income Security Act (ERISA), including defined benefit pension plans, may often have to consider climate change and ESG factors as part of their return evaluations and as part of their fiduciary duty.

• The proposal follows Trump-era rules which garnered significant pushback from industry players. One, when initially proposed during the summer last year, would have prevented corporate pensions from investing in ESG vehicles.

Source: https://www.dol.gov/newsroom/releases/ebsa/ebsa20211013