Green America, our members, and allies all secured a victory for investors nationwide.
Green America actively opposed Trump-era rulings that undercut the ability of retirement plans to include investment options that consider environmental, social, and corporate governance (ESG) criteria and that made it difficult for retirement plan fiduciaries to vote on ESG-related shareholder resolutions.
On November 22, 2022, the Department of Labor (DOL) reversed these rulings with a final rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, that allows ESG criteria to be applied in employer-sponsored retirement investments and in the voting of shareholder ballots. In particular, the ability to consider climate impacts is a top concern of many investors and can now remain a consideration in 401(k) investments as the climate crisis escalates.
Green America supports the new rule. Decades of investment experience globally has shown that including environmental, social, and corporate governance criteria in the investment process provides competitive returns, which the Trump administration and right-wing pundits now claim. To the contrary, taking ESG factors into account means investors have a greater understanding of risk and opportunity and can invest more wisely to maximize their returns. The Department of Labor recognizes the value of investor choice and the benefits of ESG criteria as it works to protect the retirement assets of millions of American workers and their families. Globally, $35 trillion is invested using an ESG framework.
In addition, the ability of retirement plan fiduciaries to vote shareholder resolutions on issues such as climate, labor protections, human rights, corporate political contributions, and more plays a key role in improving corporate conduct. Green America and our allies urged the DOL to remove regulatory barriers to voting which the DOL has done.
Green America recognizes the importance of the new DOL rule and believes that ultimately all investing should be socially and environmentally responsible.