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Law360: Despite DOL Proposed Rule, ESG Investing Faces Barriers

December 14, 2021

O’Melveny counsel William Pollack authored this bylined article discussing the U.S. Department of Labor's proposed rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights. The rule permits retirement plan fiduciaries to consider environmental, social, and governance (ESG) factors when selecting investments and exercising shareholder proxies. “The DOL's action has been hailed by social and environment activists as a momentous development, but the potential impact may be reduced by retirement plan fiduciaries' cautiousness in the face of the recent flood of Employee Retirement Income Security Act litigation,” Pollack wrote. “In short, there is reason to believe that the new DOL regulations will accelerate the already sizable shift of assets into ESG funds, which could have many beneficial impacts. The DOL's regulation does not, however, lessen the litigation risk faced by fiduciaries who may, accordingly, act cautiously in anticipation of future developments ... before making a change.”

Read the full article here.