Department of Labor Rule Proposal on ESG integration

4 members

This collaboration is complete. Please click here to view outcomes.
Completion date:
Summary

On June 23, the Department of Labor issued a notice of proposed rulemaking entitled “Financial Factors in Selecting Plan Investments” aimed at clarifying the obligations related to consideration of ESG factors by ERISA fiduciaries. The PRI urges signatories to respond to the consultation. 

Business case

Despite the aim of providing clarity for ERISA fiduciaries, the Proposal creates confusion. This appears to be, in part, because of a failure to distinguish ESG integration and economically targeted investing (ETI). ESG integration is the consideration of ESG factors as part of prudent risk management and a strategy to take investment actions aimed at responding to those risks. ETIs are investments that aim to provide financial returns as well as collateral, non-financial benefits. For example, ETIs often advertise job creation or climate impact as goals of the investment.

Collaboration details

Type
Consultation
Status
Completed
ESG theme
  • Public Policy
Created on
Geography
United States
Attachments
  • dol_template_letter_final_.pdf Download
  • fact_sheet_-_financial_factors_in_selecting_plan_investments.pdf Download
  • financial_factors_selecting_plan_investments_v2_26737.pdf Download