11.22.22

Labor Department Clears Path for 401(k) Plans To Offer ESG Funds

by: Anne Tergesen

More U.S. retirement savers could soon have the option to invest in funds based on environmental, social and governance (ESG) principles, under final regulations issued by the U.S. Department of Labor (DOL). The new rule reverses a move by the Trump administration in 2020 that made it harder for 401(k) plans to put ESG investments on the investment menu. That regulation went into effect shortly before President Biden took office, but the administration moved to replace it. The new rule allows employers to consider ESG factors when selecting 401(k) investments. Currently, just 13% of 401(k) plans offer socially responsible investment options to employees, according to data that Vanguard Group publishes on the 401(k) plans it administers.

Read the full article on Wall Street Journal