As federal rulemakers continue to shape guidance around ESG, corporate leaders have eagerly awaited the hint of clarity the rules are expected to bring. Too bad there’s the small matter of state lawmakers. ESG correspondent John Peiserich sets the stage for the upcoming clash between federal and state rules.
A major challenge for companies today is balancing the demands of investors and consumers against a shifting political backdrop at both the state and federal levels. This challenge is expected to come into even sharper focus next month when the U.S. Department of Labor plans to formally issue ESG-related rules.
In October 2021, the department published a notice of proposed rulemaking, which received almost 1,000 comments within the public comment period. Not only does the proposed rule allow consideration of ESG factors in investment decisions for Employee Retirement Income Security Act (ERISA) plans, “a fiduciary’s duty of prudence may often require an evaluation of the economic effects of climate change and other ESG factors on the particular investment or investment course of action.”
Examples from the fact sheet include:
- Climate-change related factors, such as a corporation’s exposure to the physical and…
