Bloomberg Law
June 25, 2020, 5:28 PM

Trump Administration Targets ESG Funds With Proposed 401(k) Rule

Emily Chasan
Emily Chasan
Bloomberg News

One in four of every professionally invested U.S. dollar is tied to environmental, social and governance criteria. But the Trump administration’s latest proposed rule change may make it harder for ESG funds to attract interest from retirement plans.

On June 23, the Labor Department led by Secretary Eugene Scalia proposed an update to the Employee Retirement Income Security Act of 1974 (ERISA) that would require those overseeing pension and 401(k) plans to always put economic interests ahead of “non-pecuniary” goals. The agency specifically called out ESG investing in its proposal.

“After years of the Department of Labor having varying degrees ...

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