Diluted ‘Do-Good’ Investing Rule More Palatable but Less Cogent

A final record-keeping rule for “do-good” retirement investing may ward off potential litigation now that regulators have walked back their proposed crackdown of environmental, social, and corporate governance (ESG)-focused funds.

The revamped rule reiterates that fiduciary duty is about protecting the financial security of plan participants, a guiding principle established by the Employee Retirement Income Security Act of 1974. The proposed rule aimed to put a stop to the conflicting investment advice each administration has piled on over time, but Labor Department officials appear to have softened their position in pursuit of compromise.

“They have dialed this rule so far ...