Brad Campbell Addresses Department of Labor's ESG Rule With Ignites

In “DOL’s ESG Rule Could Be Here by Next Month,” benefits and executive compensation partner Brad Campbell spoke to Ignites about the Department of Labor’s (DOL) rule governing environmental, social and governance (ESG) investments in retirement plans.

Plan sponsors and investment managers “want to be able to invest in ESG to the extent that it makes sense to us, based on our economic analysis,” Campbell said. He noted that the proposed rule would continue the DOL’s long-standing policy of forbidding fiduciaries from sacrificing returns or increasing risk for non-pecuniary reasons.

“The legally correct answer would be to let fiduciaries pick these ESG options based on their economic analysis,” Campbell stated. “Whether that will be the political answer is another question.”

Campbell added that the DOL is less likely to amend a provision that would allow the use of ESG factors in qualified default investment alternatives. “The SEC’s actions in terms of defining some rules of the road for what ESG means will probably have a bigger significance of having ESG in Employee Retirement Income Security Act (ERISA) plans than this DOL rule.”

The full article is available for Ignites subscribers.