State ESG Rules: What DC Plan Sponsors Need to Know
The Department of Labor proposed subsequent rules in 2020 and 2021 to first discourage and then protect the use of ESG factors in the fiduciary decision-making processes. These rules, while important to the industry as a whole, would not apply directly to governmental plans that are not bound to ERISA. In response, several states have stepped in to create their own rules to influence the actions of public plan sponsors. The landscape of these rules is both complex and diverse.