A game-changer for ESG adoption? George Michael Gerstein Discusses DOL Proposal and Impact with FundFire
The full article can be found here.
By: George Michael Gerstein and Wesley Davis
Plan sponsors and financial services firms that act as fiduciaries to ERISA plans and “plan asset” funds should take note of a new rule proposal that the U.S. Department of Labor (DOL) announced today. The proposed rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” would address ERISA fiduciaries’ duties with regard to considering climate change and other environmental, social and governance (ESG) factors when selecting investments and exercising shareholder rights.
This rule, if adopted, would have significant implications for financial services firms that act as ERISA fiduciaries. The comment period will run for 60 days after the rule’s publication in the Federal Register. We will be preparing a detailed analysis in the coming days.
The release of DOL's ESG/proxy voting rule proposal appears to be imminent.
— Fiduciary Governance Group (@FidGovGroup) October 7, 2021
Recent incidents like the Colonial Pipeline cyber attack and the Equifax data breach highlight the vulnerability of private information and critical IT systems. Given that defined contribution assets are now at $12 trillion, there’s increased concern over retirement savings being more at risk since plan sponsors and their vendors collect highly-sensitive personal data from plan participants and beneficiaries.
In April, the U.S. Department of Labor announced new guidance for plan sponsors, plan fiduciaries, record keepers and plan participants on best practices for maintaining cybersecurity, including tips on how to protect retirement benefits. This is the first time the department’s Employee Benefits Security Administration has issued cybersecurity guidance which includes the following discussion points plan sponsors must follow:
When: Monday, October 25, 2021. 2 pm – 2:50 pm EST/11:00 am-11:50 am PST
Moderator: Tim Rouse, Executive Director, The Spark Institute, Inc.
Register for the live, in-person event here.
Register for the virtual conference here.
A U.S. Labor Department proposal that is expected to undo limits the Trump administration set on socially conscious retirement investing could serve another purpose: giving regulators an open door to settle the debate over climate-friendly investing for good.
The full Society of FSP’s article can also be found here.