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ESG Investing in Retirement Plans

The goal of this introduced legislation is to provide the legal certainty to ensure that workplace retirement plans can offer Environmental, Social and Governance (ESG) options. The legislation would amend ERISA to permit plans to consider ESG factors in investment decisions expected to impact investment outcomes, when considered in a “prudent manner and consistent with fiduciary obligations” and to “codify a longstanding principle that plans may consider ESG factors as tiebreakers when deciding between otherwise comparable options”. Also, the Act seeks to limit future regulatory actions that impose unfair regulatory burdens in an effort to discourage ESG investing by ERISA plans.

www.planadviser.com; May 21, 2021.