Ginny Cleaveland, Deputy Press Secretary, Fossil-Free Finance, Sierra Club, ginny.cleaveland@sierraclub.org, 415-508-8498 (Pacific Time)
WASHINGTON, DC – The Sierra Club’s Fossil-Free Finance campaign applauds a move announced today by the US Department of Labor (DOL) that restores the ability for managers of private, employer-sponsored retirement plans to consider environment, social justice, and corporate governance (ESG) factors when making investments and voting on shareholder proposals.
The decision comes nearly a year after the close of a comment period on the proposed rule, intended to undo a push by the Trump administration to impose additional costs and burdens meant to discourage fund managers from considering climate change in their decision making.
During the comment period, the Sierra Club and Americans for Financial Reform Education Fund submitted a comment letter signed by 12 groups in support of the proposed rule. In addition, the Sierra Club helped coordinate thousands of public comments urging the DOL to go further, by requiring fund managers to consider climate risk and provide options for savers who want to invest in sustainable businesses.
In response to the ruling, Jessye Waxman, Senior Campaign Representative for the Sierra Club’s Fossil-Free Finance campaign, issued the following statement:
“The management of systemic risks, such as climate change, is a fundamental part of fiduciary responsibility and is critical to protecting the savings of workers and retirees. The Department of Labor's ruling removes the barriers to the responsible management of these risks that were put in place by politically motivated actors. This decision lays the groundwork for future rulemakings that establish affirmative duties of retirement fund fiduciaries to manage climate and other systemic risks.”
BACKGROUND
Millions of workers in the US rely on private pension funds to manage their retirement savings. This ruling allows asset managers to better protect workers’ savings from the material ESG risks facing capital markets, and grow workers’ savings so they can retire comfortably. The health of the US economy relies on the financial wellness of the people who operate in it, so more resilient private pension funds mean healthy savings, which helps keep the economy running smoothly.
ESG risks, particularly those related to climate disasters, are becoming increasingly material to businesses of all industries and sizes, and thus to these managers’ portfolios. The DOL’s decision gives private pension fund managers the green light to fulfill their fiduciary duty, and empowers these asset managers to uphold their responsibility to consider risks and make prudent investment decisions, without fear of legal or financial threats.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.