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Labor Department Says Do-Good Investments Not Always `Prudent’

April 24, 2018, 7:47 PM

The Trump administration unveiled guidance aimed at the burgeoning socially-responsible investment industry that left some investors scratching their heads.

The Department of Labor, which oversees retirement-plan funds, published guidelines April 23 that said investments based on environmental, social and governance issues aren’t always a “prudent choice” and that such factors shouldn’t “too readily” be considered as economically relevant by fiduciaries. That differs from 2016 guidance from the Obama administration, which said such plans could consider ESG factors without violating their fiduciary duty, opening the way for more retirees to pursue socially-responsible investment strategies.

Under the latest guidelines, fiduciaries must “always ...

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