ASA Urges DOL to Drop ESG Rule Proposal That Harms Workers and Retirees

WASHINGTON – The American Securities Association (ASA) today sent a letter to the Department of Labor (DOL) outlining its concerns with the proposed rule entitled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.”

“Prudence demands the DOL drop this proposal, Wall Street’s ESG Industrial Complex is not more important than the retirement savings of America’s working families,” said ASA CEO Chris Iacovella. “ERISA fiduciaries should never be permitted to subordinate the interests of plan participants to political objectives,” Iacovella wrote in the letter. “Yet, the Proposal does exactly that by directing the capital of retirees into financial products seeking to achieve political goals that are not correlated with investor return.”

“The DOL has long held that the voting of proxies is covered by a fiduciary’s obligations under ERISA. However, the Proposal changes this precedent by making it easier for plan assets to be used for proxy voting on matters that may not be tied to economic return at all. This would be a historic and unprecedented change to the obligations of a plan fiduciary that will harm workers,” Iacovella wrote.

The ASA has been actively involved with Congress, regulatory agencies, and market participants regarding the debate over ESG investing and the role that regulators should play to address the growth of ESG products. Earlier this year, ASA released an ESG Disclosure Resource Index to help inform the Securities and Exchange Commission (SEC) as it considers whether to mandate climate and environmental, social, and governance disclosures for public companies.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.