Bloomberg Law
Jan. 20, 2021, 10:38 PM

Biden Seeks Review of Trump’s ‘Do-Good’ Investing Rule

Austin R. Ramsey
Austin R. Ramsey

The newly installed Biden administration wants a review of a Labor Department investing rule that took effect earlier this month requiring retirement plan fiduciaries to put financial considerations above all else in their decisions.

The department’s so-called “do-good” investing rule [RIN: 1210-AB95] codified the Trump administration’s position against environmental, social, and corporate governance funds. The rule limited plan fiduciaries to investment decisions based on “pecuniary factors,” or solely the financial interests of plan participants and their retirement benefits.

It followed a flurry of regulations in the final months of former President Donald Trump’s administration reconfiguring fiduciary responsibilities and curbing proxy voting powers.

Before the rule went into effect on Jan. 12, fiduciaries could opt to use retirement investments to advance social causes when those investments would otherwise affect investors’ interests equally. In contrast, fiduciaries seeking to break a tie between investments under the rule were subjected to strict recordkeeping and documentation standards, whenever those investments were ESG funds.

When Biden was vice president, then-President Barack Obama issued an interpretive bulletin promoting ESG investing as long as it was “appropriate for the plan and economically and financially equivalent with respect to the plan’s investment objectives, return, risk and other financial attributes as competing investment choices.”

There has been conflict over the role of ESG investments for more than a century, as battle lines were drawn between shareholder interest in profits and those who believe in socially responsible investing. At least three different Trump agencies promulgated rules that narrowed the scope for considering ESG factors in business and investing decisions.

The “do-good” investing rule, advanced by the Department of Labor’s Employee Benefits Security Administration, applied to retirement plans covered by the Employee Retirement Income Security Act of 1974. The law sets minimum standards for voluntary worker benefits in the private sector.

To contact the reporter on this story: Austin R. Ramsey in Washington at

To contact the editors responsible for this story: Martha Mueller Neff at; Andrew Harris at