CII’s comment to DOL/EBSA includes an outstanding list of empirical studies supporting the financial impact of ESG factors. The full comment is below. An excerpt:
We also believe the Proposed Rule would create significant burdens of proof for investment approaches that emphasize investment risk and opportunities around ill-defined ESG matters, without subjecting funds that dismiss or minimize ESG risks and opportunities (including avoidance for ideological reasons) to the same burdens. We also believe the Proposed Rule would impose new recordkeeping costs for plan fiduciaries that are likely much higher than DOL estimates, exceeding the alleged benefits of the proposed change. We, therefore, respectfully oppose the Proposed Rule….DOL fails to acknowledge the consequential body of research finding that corporate governance can have a material effect on the return or risk of an investment….The Proposed Rule, however, fails to identify and weigh the growing body of evidence linking certain environmental and social policy matters with large potential impacts on long-term shareholder value….We presume that describing what a plan fiduciary must do in order to satisfy the duty of loyalty by requiring compliance with the duty of loyalty was a drafting error. Like many of the other provisions of the Proposed Rule these provisions should be revised or, more preferably, discarded.