Center for American Progress

Workers should be able to invest their 401(k)s in companies that won’t harm the climate
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Workers should be able to invest their 401(k)s in companies that won’t harm the climate

Alexandra Thornton explains the irresponsibility of the U.S. Department of Labor's proposed rule to prevent financial managers from offering climate-responsible index funds for 401(k) investors.

Climate change. Exploitation of essential workers. Racism. In the face of an urgent need to tackle these societal challenges, the U.S. Department of Labor released a proposed rule on June 24 that undermines the ability of financial managers entrusted with investing the retirement savings of millions of Americans to consider environmental, social and governance (ESG) impacts on those investments.

If implemented, the rule could mean that the company that manages your 401(k) savings wouldn’t be able to offer you a socially responsible index fund, even if that is your personal preference.

The above excerpt was originally published in Market Watch. Click here to view the full article.

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Authors

Alexandra Thornton

Senior Director, Tax Policy