06.05.23
DOL ESG Rule Is 'Product of Reasoned Decision Making,' Justice Department Says
by: Brian Croce
The U.S. Department of Labor's (DOL) new rule permitting retirement plan fiduciaries to consider environmental, social and governance (ESG) factors when selecting investments and exercising shareholder rights is the "product of reasoned decision making," according to the U.S. Department of Justice (DOJ). The rule "falls comfortably within the department's statutory authority," the DOJ said in a filing in the U.S. District Court in Amarillo, Texas. In January, Republican attorneys general from the 25 states filed a lawsuit arguing that the DOL's rule undermines key protections for retirement savers, oversteps the department's authority under the Employment Retirement Income Security Act and is arbitrary and capricious. But the DOJ said the rule, which took effect Jan. 30, was needed to diminish the "chilling effect" on considering ESG factors.
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