The US Department of Labor’s ‘ESG Rule’ received more backlash from the sustainable investment industry than any other anti-sustainability rule introduced under former US President, Donald Trump.
The rule, officially known as Financial Factors in Selecting Plan Investments, seeks to overhaul the Employee Retirement Income Security Act (ERISA) - the rules that govern employer-backed pension funds - “in light of recent trends involving ESG investing”. The DOL said it was “concerned” that those trends may prompt investors to “choose investments or investment courses of action to promote environmental, social, and public policy goals unrelated to the interests of plan participants and beneficiaries in financial benefits from the plan”. And so it wanted to clarify that fiduciaries should steer clear of such investments or actions unless they could prove they wouldn’t hurt returns.
Its anti-ESG credentials were never in question. “ERISA doesn’