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DOL Issues Proposed Rule (Again) to Address Selecting Plan Investments and Exercising Shareholder Rights

On October 13, 2021, the DOL released a proposed rule which effectively provides that ERISA plan fiduciaries may consider climate change and other environmental, social, and governance (“ESG”) factors when they make investment decisions and when they exercise shareholder rights. Under the Trump administration, in late 2020, the DOL previously issued a final rule on “Financial Factors in Selecting Plan Investments” (generally requiring plan fiduciaries to select investments and investment courses of action based solely on consideration of “pecuniary factors”) and a related final rule on “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” (addressing obligations of plan fiduciaries under ERISA when voting proxies and exercising other shareholder rights in connection with plan investments in shares of stock) (collectively, the “Prior Rules”). Subsequently, President Biden issued executive orders which directed the DOL to consider a proposed rule to suspend, revise, or rescind the Prior Rules, and in March 2021, the… Continue Reading

October 2021
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