401(k)s Could Become Even Less Welcoming to ESG Funds

401(k)s Could Become Even Less Welcoming to ESG Funds
AP Photo/Richard Drew, File

Investors looking for more sustainable-investing funds in their retirement plans could be in for a wait.

The U.S. Labor Department in June proposed a rule that would make it more difficult for funds focused on so-called do-good investments—meaning they select securities based on environmental, social and governance (ESG) factors—to be included in 401(k) plans. The department says the rule, which could take effect as early as Jan. 1, is needed to protect workers from investments that aren’t in their best financial interests. 

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