“New Labor Department rule puts 401(k)s at greater risk” – The Hill – October 21, 2020

On October 21, 2020 Fiona Reynolds, CEO of the UN-supported Principles for Responsible Investment (PRI), contributed an opinion piece to The Hill.

The largest asset owners and managers around the world are considering environmental, social and governance (ESG) factors in their investment decision making more than ever before, and yet U.S. regulators are moving in the opposite direction.

Last week, the U.S. Department of Labor (DOL) moved to finalize a new proposed rule that would limit employer-sponsored retirement plans from investing with ESG factors in mind. The proposal represents a concerted effort to block the progress toward ESG integration we’ve seen around the world, and thereby undermines investors’ ability to gauge risks and generate value in the U.S. market.

Since it was announced in July, the DOL’s proposal has faced a tidal wave of opposition from pension funds, money managers and investor organizations, including my organization, the United Nations-supported Principles for Responsible Investment (PRI), which represents over 3,000 global investors with more than $100 trillion in assets. In fact, more than 95 percent of the public comments on the DOL’s proposed rule opposed it. The PRI was among those that submitted a comment to the DOL, where we laid out the case for why the proposed rule would hurt rather than help American investors.

By ignoring the growing focus on, and evidence of, material ESG factors by investors and regulators around the world, the DOL has proposed U.S. investors take a significant step backward on responsible investing. This would not only hamper U.S. investors ability to compete in a global market in which ESG factors are increasingly shaping investment decisions and outcomes, but it would put the very people the DOL is meant to serve — American retirees — at greater risk.”

You may read the opinion piece on The Hill internet site.