US SIF issues statement on Department of Labor rulemaking related to ERISA and proxy voting
WASHINGTON, D.C., December 11, 2020 – US SIF: The Forum for Sustainable and Responsible Investment today issued the following statement on the Department of Labor's (DOL) final rulemaking related to proxy voting by fiduciaries of ERISA-governed retirement plans (“Fiduciary Duties Regarding Proxy Voting and Shareholder Rights”).
US SIF CEO Lisa Woll said, “The DOL listened to investors and the public and made significant changes to the proxy voting proposal which was released on August 31, 2020.” While it is unfortunate that the background and discussion sections of today's release include a number of fallacies about investing with the consideration of environmental and social data, the worst provisions of the proposed rule were omitted. Investors and financial services commenters were unified in their opposition to the proposal. An analysis found that:
- 96% of asset managers and investment advisers were opposed.
- 97% of investor organizations, multi-employer plans and labor unions were opposed.
- 91% of financial services providers were also opposed.
- Excluding individual comment letters, nearly 70% of all commenters opposed the rule.
“Most notably the final rule removed the onerous and unworkable provision to calculate the economic impact of every vote on the proxy ballot, including votes for or against directors, to approve independent auditors as well as say-on-pay and shareholder proposals. This would have been a costly and imprudent use of plan assets – the exact thing DOL should be protecting against.
“The final rule also removed a provision to give safe harbor to fiduciaries if they chose to have a policy to vote in accordance with management.
“It's clear that investors find the shareholder process to be a critical way to influence and communicate with companies. From 2018 through the first half of 2020, 149 institutional investors and 56 investment managers collectively controlling nearly $2.0 trillion in assets at the start of 2020 filed or co-filed shareholder resolutions on ESG issues, according to the US SIF Foundation's 2020 Report on Sustainable and Impact Investing Trends.
“We look forward to working with the next administration to ensure that shareholder rights within ERISA-governed plans are unambiguous.”
US SIF's comment letter on the original proposal can be found here.
About US SIF
US SIF: The Forum for Sustainable and Responsible Investment is the leading voice advancing sustainable and impact investing across all asset classes. Its mission is to rapidly shift investment practices toward sustainability, focusing on long-term investment and the generation of positive social and environmental impacts. US SIF members include investment management and advisory firms, mutual fund companies, asset owners, research firms, financial planners and advisors, broker-dealers, community investing organizations and nonprofit associations.
Learn more at ussif.org.