SASB’s comment emphasizes the financial impact of ESG disclosures. An excerpt, with the full comment below:
Why, given the evidence of financial materiality found by SASB and numerous scholars, would ESG investing be singled out by DOL for a special rule, a special documentation requirement, and a “heightened” level of scrutiny? The DOL’s pejorative treatment of ESG investing seems designed to tamp down on such activity despite the materiality assessments reached by SASB and other experts in this area. That is, indeed, the way that the Proposal is being broadly interpreted. See, e.g., Groom Law Group (Legal Memorandum), “DOL Proposes Rules to Crack Down on ESG”, June 25, 2020; Pensions and Investments, “DOL Proposal Could Chill Prospects for ESG Investing in ERISA Plans”, June 26, 2020; Seyfarth (Legal Memorandum), “Has the DOL Closed the Door on ESG Investing in ERISA Plans?”, July 10, 2020; Martin Lipton, Wachtell, Lipton, Rosen & Katz, Harvard Law School Forum on Corporate Governance, July 7, 2020 (stating that
The end result of the DOL’s Proposal would be harmful, rather than beneficial, to plan beneficiaries. And because the Release fails to offer an evidentiary basis for its approach, the efficacy of the Proposal under an arbitrary and capricious standard of administrative rulemaking would be seriously in doubt.