New DOL Rule Enables Consideration of ESG Factors in Investing, Plus the SEC Continues its ESG Enforcement Push in the Absence of Final SEC Rules -

On November 22, the US Department of Labor (DOL) announced a final rule promulgated by the Employee Benefits Security Administration that allows retirement plan fiduciaries to consider environmental, social and governance (ESG) factors in investment choices. The new rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” will take effect sixty days after its publication in the Federal Register, although certain proxy voting provisions will not take effect until one year after publication. The rule was issued in response to President Biden’s Executive Order 14030, which directs the federal government to highlight and consider policies to protect the retirement funds of American workers and families from ESG threats such as climate-related financial risk.