On October 30, 2020, the U.S. Department of Labor (DOL)
finalized its amendments to the investment duties regulation under
ERISA (Final Regulation), which sets out the standards for plan
fiduciaries selecting investments and provides guideposts for the
consideration of non-financial objectives such as environmental,
social and governance (ESG) aims. The overarching principle of the
Final Regulation, which is now the DOL's definitive guidance on
the topic, is that when making decisions on investments and
investment courses of action, an ERISA plan fiduciary must focus
solely on the plan's financial risks and returns and the
interests of plan participants and beneficiaries. In response to
the vociferous opposition the proposed rule generated from various
stakeholders including asset managers, plan sponsors and individual
plan participants, the DOL eliminated all ESG-specific references
in the Final Regulation and clarified that there is no per se
prohibition on selecting
