In the article “Executive Order: Biden to Order Review of DOL’s ESG Rule,” Faegre Drinker partner Brad Campbell spoke with Ignites about one of President Joe Biden’s plans to sign a number of executive orders, including one that asks the Department of Labor (DOL) to review a recently finalized rule that curbs the use of environmental, social and governance (ESG) investments within retirement plans.
Potentially including the DOL’s rule in an order that focuses on environmental policy is a significant development, Campbell said. “The executive order shifts the rhetoric around the rule” from Employee Retirement Income Security Act (ERISA) fiduciary issues, which can be nuanced, to issues like global warming and the environment, he noted. Campbell also described how “making this an issue of environmental policy rather than financial policy is politically powerful.”
Since the rule is already in effect, the DOL would have to undertake a new rulemaking process or issue guidance interpreting the Trump-era rule in a way that’s more friendly to ESG investing, Campbell added. “They could do both — guidance in the short term and rulemaking in the long term,” he said.
The full article is available for Ignites subscribers.