Seyfarth Synopsis: DOL final regulation on fiduciary implications of investing in ESG under review by the Biden administration.

You may recall our prior blog posts and Legal Update discussing the back-and-forth over the years surrounding the wisdom, or even ability, for plan fiduciaries to invest plan assets in funds with a strategy focused on factors such as environmental, social or corporate governance, sustainability or religion — the so-called ESG factors. See our blog posts here and here, and our Update here.

When we left you last, in November 2020, the DOL had finalized its regulation that basically came down on the side that ESG factors are non-pecuniary and it would be inappropriate for fiduciaries to make investment decisions based on non-pecuniary factors. This was in the face of voluminous criticism received from the investing community.

Well, this regulation is listed here among those that the Biden administration wants reviewed in accordance with the Executive Order “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” In addition, the White House issued a memo to all agency heads to “consider” postponing for 60-days rules that have published rules but have not yet taken effect.

So, stay tuned!