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Why the New ESG Rule—And Why Now? Exclusive Hauser Clip

ESG Investing

Environmental, Social and Governance (ESG) investing is nothing if not controversial—especially with its use in retirement plans.

The Trump-era ESG rule, issued in the waning days of the last administration, was said by some to have a “chilling effect” on sustainable investing, something recent ESG action by the Biden Administration hopes to reverse.

In the following clip of his exclusive interview with Tim Hauser, Deputy Assistant Secretary for Program Operations of the Employee Benefits Security Administration (EBSA), American Retirement Association CEO Brian Graff asks about the thinking behind the final rule. Titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights”—a.k.a. the “ESG rule—it went into effect on January 30.

“Our concern about the 2020 Rule, which we amended in this regulatory action, was that it essentially was being read by a number of fiduciaries as telling them, ‘You should not invest in ESG, or at least you should be uncomfortable about investing in investments and investment funds that take into consideration ESG factors,’” Hauser explains. “We wanted to restore a sense of neutrality.”





All comments
Mike Sladky
7 months 1 week ago
NO Mr. Hauser, the last administration was telling plan investment fiduciaries and committees to keep their personal views of climate issues and how our society should look out of your investment decision making process.
Timothy Brown
7 months 1 week ago
Agreed Mike. They were telling fiduciaries no such thing. Only to look strictly at investment related issues and how to maximize returns.