Trump administration moves to squash “socially responsible” investing – By Irina Ivanova (CBS News) / July 16 2020
The Trump Administration is moving to dramatically curtail “socially responsible” investments, an area that has seen a surge of interest in recent years amid mounting alarm about climate change.
The Department of Labor is proposing to change a rule governing employee retirement plans to discourage money managers from so-called socially responsible investing. Under the plan, employers and others who run 401(k) or pension plans would be required to consider only the financial return an investment offers — not other factors such as its environmental impact. The proposal also bars Environmental, Social and Governance (ESG) investments from being the default choice in any public or private retirement plan.
The rule, which potentially affects more than $10 trillion held in U.S. retirement plans, poses “the biggest single threat that the responsible investment industry faces,” according to Fiona Reynolds, CEO of Principles for Responsible Investing, a United Nations-affiliated investor initiative.
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