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Green is Good. What the DOL’s New ESG Guidelines Do for Us

January 03, 2023

The new DOL rule on Environmental, Social, and Governance (ESG) investing and proxy voting removes the cumbersome weights that the prior rule imposed in considering ESG factors when selecting or monitoring plan investments. Plus, it’s a good thing that most active plans are of the defined contribution variety with participant-directed investment for all or some of a participant’s plan balance. Fiduciaries don’t violate their duty of loyalty to participants if they consider participant preferences for ESG-friendly investments in choosing to include such investment options in a prudently-selected plan menu, so, happy eco-investing!

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