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Clifford Chance

Clifford Chance

Briefings

Newsflash Briefing for Private Funds Managers: ERISA vs ESG

July 14, 2020

The Department of Labor has proposed a rule that will inhibit US private employer retirement plan investment in funds that promote the "non-pecuniary" benefits of the investment. Although the DOL did not precisely define what investments or funds would be the subject of this rule, the DOL referenced "socially responsible investing, sustainable and responsible investing, environmental, social and corporate governance investing, impact investing, and economically targeted investing."1. For purposes of this discussion only, we refer to all investment strategies that may "promote non-pecuniary benefits or any other non-pecuniary goals" as "ESG." The DOL has not included an exact definition of ESG in its proposed rule.

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