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Dear John, Two weeks ago, the Department of Labor proposed new rules for how private sector retirement plans allocate investments. These rules would essentially restrict, if not ban the use of ESG (Environmental, Social and Governance) criteria as a method of selection. Currently, the Department of Labor oversees $9 trillion in assets, so these new rules would effectively shut out ESG managers from this marketplace. The American Sustainable Business Council (ASBC) and Social Venture Circle (SVC) strongly opposes these new rules, as they go against the ethos of free and fair market principles to which we subscribe. The rules also ironically preclude fiduciaries from acting in the best interests “of the plans’ participants and their beneficiaries,” as mandated by the Employee Retirement Income Security Act (ERISA). Fiduciaries should not be prevented from using environmental and social considerations which pose a material risk to their plans. ESG criteria purposely selects for additional positive attributes alongside superior performance; therefore, fiduciaries should not be restricted from accessing these investments that clearly compete with conventional active funds. We strongly believe in supporting a free and fair competitive marketplace for all sectors of industry. Please help us to campaign against these DOL proposals to ensure the safety and continued strong performance of private-sector retirement funds. | |
