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‘Do-Good’ Investing Rule Sets Course for Wary 401(k) Investors

Feb. 10, 2021, 3:52 PM

The U.S. Labor Department’s financial factors rule, widely regarded as a rebuke of environmental, social, and governance funds, actually could serve to persuade skittish fiduciaries to incorporate socially conscious investments, attorneys and consultants say.

The so-called “do-good” investing rule requiring fiduciaries to invest based solely on financial considerations hasn’t had the chilling effect on ESG investing that the former administration may have sought. The market for these kinds of investments has far outgrown Labor Department reminders that financial factors should prevail, and it could, instead, spur on typically reticent 401(k) investors.

“The rule we’ve been left with changes how all ...

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