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Are the Reports that the DOL Guidance Will Lead to the Demise of ESG-Focused Plans Greatly Exaggerated?

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Apr 30, 2018

On April 30, 2018, Davis Polk & Wardwell LLP posted a briefing on how there has been some speculation that perhaps the positions outlined in the bulletin issued by the U.S. Department of Labor related to considerations of Environmental, Social and Governance (ESG) factors by ERISA plan fiduciaries would act as a speed bump to the increasing focus by investors on ESG matters at public companies.

The Bulletin makes clear that plan fiduciaries in managing and investing plan assets cannot assume greater investment risks, or sacrifice investment returns, to fulfill social policy goals.

Also, fiduciaries can participate in proxy voting and other shareholder engagement activities if there is a reasonable expectation that such activities are likely to enhance the economic value of the investment after taking into account the costs involved.

Review the full briefing on Davis Polk & Wardwell LLP's website.

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