Late last year, the Department of Labor under President Biden promulgated a new rule on “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” superseding the Department’s 2020 rule. Reporting on the matter has suggested that the new Biden Rule encourages ESG investing, in contrast to the previous Trump Rule, which was reported as hostile towards ESG investing. These reports are incorrect.
Max M. Schanzenbach (Northwestern Pritzker School of Law) and Robert H. Sitkoff (Harvard Law School) have published a Summary of the Rule to clarify the effect of the new Rule and what exactly has changed since 2020.
For more information see Max M. Schanzenbach and Robert H. Sitkoff “ESG Investing After the DOL Rule on ‘Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights’”, Harvard Law School Forum on Corporate Governance, February 2, 2023.