We are delighted that the DOL/EBSA has issued a new rule on ESG and proxy voting, making it clear that ESG factors are a legitimate concern for ERISA fiduciaries in assessing risk and return. The rule takes effect in 60 days except for some of the proxy voting provisions which will take effect in a year. Full text of the rule.

The U.S. Department of Labor today announced a final rule that allows plan fiduciaries to consider climate change and other environmental, social and governance factors when they select retirement investments and exercise shareholder rights, such as proxy voting.

After extensive consultations and feedback from a wide range of stakeholders, the department concluded that two rules issued in 2020 during the prior administration unnecessarily restrained plan fiduciaries’ ability to weigh environmental, social and governance factors when choosing investments, even when those factors would benefit plan participants financially.

“Today’s rule clarifies that retirement plan fiduciaries can take into account the potential financial benefits of investing in companies committed to positive environmental, social and governance actions as they help plan participants make the most of their retirement benefits,” said Secretary of Labor Marty Walsh. “Removing the prior administration’s restrictions on plan fiduciaries will help America’s workers and their families as they save for a secure retirement.”

US Department of Labor announces final rule to remove barriers to considering environmental, social, governance factors in plan investments | U.S. Department of Labor