The Trump Administration’s Labor Department has finalized controversial rules it says only clarify those previously in place under the Employee Retirement Income Security Act (ERISA) defining a fiduciary’s investment duties. This controversial rule nonetheless adds significant hurdles for plan fiduciaries seeking to facilitate environmental, social, and governance (ESG) investments such as those focused on climate change that have gained increasing popularity across the financial sector and with investors. Now, plan fiduciaries must select investments and investment courses of action based solely on financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action.
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