Biden administration proposes reversing Trump-era rules viewed as limiting socially conscious investing.

The Labor Department will propose rule changes on Wednesday that would make it easier for retirement plans to add investment options based on environmental and social considerations — and make it possible for such options to be the default setting for enrollees.

In a reversal of a Trump-era policy, the Biden administration’s proposal makes clear that not only are retirement plan administrators permitted to consider environmental and social factors, it may be their duty to do so — particularly as the economic consequences of climate change continue to emerge.

Martin J. Walsh, the secretary of labor, said the department consulted consumer groups, asset managers and others before writing the proposed rule, and that the change was considered necessary because the old one appeared to have a “chilling effect” on using environmental, social and governance factors when evaluating investments.

“If these legal concerns were keeping fiduciaries on the sidelines, it could mean worse outcomes

Keep reading this article on The New York Times Your Money.

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