Marty Walsh's DOL releases anticipated ESG rule

In a major policy win, on November 22, 2022, the Biden-Walsh Department of Labor (DOL) released a final ESG rule reassures retirement plan advisers that they can utilize sustainable investing without running afoul of federal law. The DOL rule allows – but does not require — plan fiduciaries to consider climate change and environmental, social and governance factors in selecting investments. This overturns a DOL 2020 rule that had a chilling effect.

Heartland had a role in the win, as our Governing Board member David Keto contributed to a comment letter with US Congressman Andy Levin and 25 colleagues that urged the Biden DOL to “fix” and modernize the ESG-ETI rule, which was first adopted in 1994. Our more recent “Open Letter to the Biden-Harris Administration” urged the Department to accelerate the final rule, pushed strengthening the “S” and good union jobs in ESG, and to “hold the line” on ESG-ETIs.

As Governing Board member Tyler Gellasch pointed out, in his review of the 11/22 presser, AFL-CIO President Liz Shuler reminded the audience that DOL has now affirmed, once again, that “pension plans can create collateral benefits” — such as good union jobs and affordable housing — “while also providing strong financial returns."

Finally, don't miss the RSVP link at bottom for a great upcoming event from the AFL-CIO on pension plans and workers’ rights when investing in private equity.

We’ll have more to say about the ESG Rule — a foundational building block for sustainable investment for nearly four decades — in coming weeks.