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Commentary: New DOL rule should accelerate sustainable investment options in retirement plans

When Americans contribute to their 401(k) plans, they may not be thinking about potential issues that could impact their savings decades down the road. However, the fiduciaries responsible for those assets are thinking about exactly that in order to help ensure the best possible retirement for these investors.

A new rule from the Department of Labor clarifies that those stewards of retirement savings may consider long-term factors like environmental, social and governance issues along with other financial considerations. It recognizes that the consideration of ESG criteria can help protect the long-term interests of retirement beneficiaries and should be treated like any other investment criteria used by plan fiduciaries under the duty of loyalty and care. It effectively reverses the rule released under the prior presidential administration and should help ameliorate the gap between the growth of sustainable investment overall and the much more limited growth of sustainable investment options in retirement plans.

 

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