Letter to the Hon. Marty Walsh, Secretary of Labor - Questioning the Department of Labor on Sustainable Investing Plans

Letter

Dear Secretary Walsh,

We write to inquire about the Department of Labor's (DOL) plans regarding environmental,
social, and governance (ESG) investing and plans to formulate a new rule allowing ERISA plan
fiduciaries to consider ESG factors when evaluating plan investments. We urge DOL to issue
such a rule and ask that you inform us of DOL's plans to do so, including the process and
timetable the Department will follow. We hope to work with you to ensure that this new rule is
strong, clear, and enduring.

We objected to the previous administration's promulgation of the "Financial Factors in Selecting
Plan Investments" (the "ESG rule") regulation in November 2020, and thank the Department for
its decision not to enforce it. We agree with the Department's assessment that the "ESG rule"
had a chilling effect by creating the perception that fiduciaries could face legal risk if they
incorporated ESG principles when assessing a potential investment. We also agree with
stakeholders who argued that the "ESG rule" was rushed and failed to consider the ample
evidence highlighting the long-term value of ESG investing for workers' retirement security.

While ending that rule's enforcement is a necessary first step, we feel it is just that -- a first step.
A new rule is essential to eliminate the aforementioned chilling effect and allow plan fiduciaries
to incorporate ESG factors into their investment strategies without fear of legal consequences.

ESG investing is growing at a tremendous rate. In 2020 alone, $51.1 billion in net investments
went into sustainable funds, nearly double the previous annual record. We believe this is
evidence of workers' desire to make sure that their retirement investments reflect their values.
This desire is backed up by evidence that shows that investments that consider ESG principles
generally performed as well or better than comparable conventional investments. Workers do not have to make a trade-off between getting a return on their investments and their principles,
and the rules and regulations governing pension investments should not force them to. Instead,
those rules should provide clarity so that sustainable investing is not burdensome.

We understand that DOL has many pressing concerns under its jurisdiction, especially as the
Department strives to protect workers and Build Back Better from the pandemic. We thank you
for making workers' retirement security and investing preferences a priority. We look forward to
working with you to finalize a new rule that makes ESG investing easier for America's workers
and stand ready to provide the support necessary to do so as quickly as possible.
We look forward to your reply.