The U.S. Department of Labor (DOL) is soliciting comment through today with respect to potential amendments to the Employee Retirement Income Security Act of 1974 (ERISA) that could make it more difficult to consider ESG factors when selecting investments.
As reflected in our recently filed comment letter, ISS is urging the DOL to revise the proposal to keep from imposing unnecessary burdens on the selection of ESG investments and to employ an economic equivalence test for assessing alternative investments. We are also asking that the agency confirm that where ESG investments present material economic considerations under generally accepted investment theories, they will be treated equally with other types of investments for purposes of the ERISA duties of prudence and loyalty. We are further asking that the “economically indistinguishable” concept be modified to bring it more in line with existing guidance and that the agency schedule a public hearing on this important matter. As is customary, we believe the record should be held open for a reasonable period after the hearing to permit interested parties to submit additional comments.
I invite you to read ISS’ full comment letter on this proposed rule-making.
By Marija Kramer, Head of ISS ESG