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Last week the U.S. Labor Department finalized a new rule, “Prudence and Loyalty In Selecting Plan Investments and Exercising Shareholder Rights.”

Previous rules discouraged retirement plan fiduciaries from considering ESG factors and exercising shareholder rights.

Our friends at Morningstar shared their top takeaways about the new rule:

  1. Fiduciary duty includes consideration of climate change and other ESG issues
  2. QDIAs also get the go-ahead to consider climate change and other ESG factors
  3. Impact and other collateral benefits can be tiebreakers
  4. The prudent exercise of shareholder rights

By replacing the old rules, this new rule removes the barriers and allows plan fiduciaries to consider ESG issues. They are not required to, but now may do so.

Learn more by reading Morningstar’s full article.