The U.S. Impact Investing Alliance, along with over 20 other members of the Coalition on Inclusive Economic Growth, comprised of businesses, investors and nonprofits, submitted a letter in support of the Department of Labor’s (DOL) proposed rules clarifying retirement and pension plan fiduciaries’ use of environmental, social and governance (ESG) factors under the Employee Retirement Income Security Act (ERISA).

A set of rules from the previous administration discouraged fiduciaries from considering ESG factors in selecting investments on behalf of retirement savers. As such, the signatories applauded the DOL’s current proposal that acknowledges the financial relevance of ESG factors like climate change, governance and workforce practices, better aligning fiduciary duty with beneficiaries’ long-term interests.

Lastly, signatories recommended that policymakers consider ways to prevent fluctuation in guidance from administration to administration, as has been a concerning trend to date, causing uncertainty and market confusion.

The Alliance and the Coalition members are encouraged by the leadership demonstrated in this proposal and look forward to continued engagement with regulators throughout the rulemaking process.

As Fran Seegull, President of the Alliance, said in a statement earlier this year, “this proposal is an important step toward modernizing our notions of fiduciary duty and the materiality of impact factors... [The proposal] is a clear indication that the Biden-Harris Administration takes seriously the need to reexamine the economic structures that make up American capitalism to ensure that it works for all.”

The Alliance’s individual comment letter to DOL can be found here.