Bloomberg Law
Aug. 4, 2020, 8:21 PM

Trump’s ESG Investing Rule Creates Retiree ‘Litigation Roadmap’

Warren Rojas
Warren Rojas
Senior Reporter

A proposed record-keeping rule for socially conscious retirement investments must go unless plan sponsors want to spend more time in court, benefits advisers told the Labor Department.

The regulation would require plan fiduciaries to fully document their reasoning for investing in environmental, social, and corporate governance (ESG)-focused funds. That change would create a separate standard for evaluating ESG-related funds than other investments, something plan participants could latch onto in cases challenging the financial management of work-sponsored retirement accounts.

“The documentation of ESG considerations creates a possible litigation roadmap,” Aliya Robinson, an ERISA Industry Committee retirement policy adviser, said in a ...

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