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Large asset management firms oppose Labor Department limits on green investing

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The world’s largest asset managers are speaking out against a Trump administration plan that would make it more difficult for them to incorporate environmental, social and governance (ESG) factors when making investment decisions, a move that could limit green investing in 401(k) plans, Bloomberg reported. The U.S. Department of Labor rule, proposed in June, would change the Employee Retirement Income Security Act of 1974 to require those overseeing pension and 401(k) plans to always put economic interests ahead of so-called nonpecuniary goals. Fidelity Investments wrote in an 11-page letter to the federal agency challenging the proposal’s assumption — that ESG investment strategies sacrifice returns, increase risks and promote goals unrelated to financial performance — isn’t “well grounded or supported by much of the emerging data.” Of 46 advisers who gave feedback to the department during its comment period ending July 30, all but two expressed opposition to the proposal, Financial Planning reported. 

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