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U.S. Labor Department proposes counter rule to Trump-era investment measures

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WASHINGTON, Oct 13 (Reuters) – The U.S. Department of Labor on Wednesday proposed a rule aimed to override a pair of Trump-era measures that had barred retirement and pension plans from contemplating local weather change and different environmental, social and governance (ESG) components once they choose investments.

The DOL proposal, which is topic to a 60-comment interval earlier than it may be adopted, comes after the company in March mentioned it could not implement the 2020 guidelines meant to curb investments based mostly on environmental and social components, which cowl trillions of {dollars} in retirement accounts, and shareholder voting in company conferences.

Trump administration officers had mentioned the principles targeted investment managers on retirees’ monetary pursuits and “material” dangers to returns, slightly than potential political points.

The company’s Wednesday proposal, nonetheless, responds to criticism by traders and their advocates who’ve pushed corporations on company ballots to handle points starting from systemic racism to local weather change, and say the business-friendly measures adopted underneath Trump have been misguided.

The proposal follows a May Executive Order that President Joe Biden signed to direct the federal authorities to implement insurance policies that assist safeguard American households from climate-related monetary danger.

It would “bolster the resilience of workers’ retirement savings and pensions by removing the artificial impediments – and chilling effect on environmental, social and governance investments – caused by the prior administration’s rules,” mentioned Ali Khawar, an appearing assistant secretary at DOL.

“Climate change and other ESG factors can be financially material and when they are, considering them will inevitably lead to better long-term risk-adjusted returns.”

Reporting by Katanga Johnson; Editing by Jan Harvey

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