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The Evolution of Fiduciary Responsibilities in 401(k)s

ESG investments have become a hot-button issue over the past couple of years. In addition to greenwashing concerns, the ESG concept has become highly politicized. Some people view ESG as a political agenda rather than a risk strategy, while others believe existing rules force them to invest in fossil fuels, tobacco companies, and similar industries.

The Department of Labor (DOL) initially limited 401(k) plan sponsors’ consideration of nonfinancial factors, like ESG criteria, when building retirement portfolios. However, the incoming Biden administration refused to enforce the rule and eventually issued its own rule permitting sponsors to consider climate change and other ESG factors.

Be sure to check the Retirement Channel to learn more about investing strategies to build up your nest egg.

Impact on 401(k) Plan Options

Impact on Climate Risks & Goals

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