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Commentary

The Labor Department Wants to Take Away Access to ESG Investments in 401(k) Plans

What we said in our comment letter on the new rule.

The Labor Department proposed a rule last month that would make it more difficult for 401(k) plans to include investments that consider environmental, social, and governance factors in their retirement plans. We've responded to this proposal by writing to the Department with a simple message: The rule is a bad idea that would take away important options from retirement investors and deny them access to the best analysis on mitigating ESG risks.

Simply stated, the Labor Department's proposed rule is out of step with the best practices that asset managers and financial advisors use to integrate ESG considerations into their investment processes and selections. Indeed, as we outlined in our recent paper, ESG risk analysis should be part of any prudent investment analysis--and not be called out for special, unique scrutiny.

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