US SIF supports legislation to revise employee retirement income security act (ERISA)
US SIF SUPPORTS LEGISLATION TO REVISE EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA)
“Financial Factors in Selecting Retirement Plan Investments Act” Introduced in Senate; will allow ESG funds as default options
WASHINGTON, D.C., May 20, 2021 – US SIF: The Forum for Sustainable and Responsible Investment today released a statement applauding the introduction of the “Financial Factors in Selecting Retirement Plan Investments Act.'' The bill, introduced by Senator Tina Smith (D-MN), makes clear that environmental, social and governance (ESG) criteria may be considered in ERISA-governed retirement plans and will end the policy pendulum of regulatory interpretations on this issue at the Department of Labor (DOL).
Lisa Woll, CEO of US SIF made the following statement:
“Investors consider ESG criteria because they are material to financial performance. The legislation ensures the Department of Labor will treat the use of ESG criteria for assessing potential performance the same as it treats traditional GAAP-reported financial information. Both affect financial performance.
In addition, the legislation clarifies that ESG criteria may be considered in qualified default investment alternatives (QDIA). Without this clarification, plan fiduciaries may remain reluctant to offer sustainable investment products in default options due to concerns about regulatory and litigation risks. In fact, it is prudent for QDIA investments to consider long-term threats like climate change to protect the long-term interests of plan participants.”
About US SIF and the US SIF Foundation
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, community investing organizations and nonprofit associations.
US SIF is supported in its work by the US SIF Foundation, a 501(C)(3) organization that undertakes educational and research activities to advance the mission of US SIF.
Learn more at ussif.org.