Attorney General Raoul Fights to Protect Retirement Savings

Attorney General Kwame Raoul, as part of a coalition of 21 attorneys general, opposed a legislative effort to overturn a federal rule that helps protect employee retirement savings. The rule, issued by the U.S. Department of Labor (DOL), clarifies that fiduciaries of private-sector employee retirement plans like a 401(k), can consider environmental, social and governance (ESG) factors when making investment decisions.

In the letter, to members of Congress, Attorney General Raoul and the coalition asserted the DOL rule helps fiduciaries make prudent long-term investment decisions for the employees they represent by allowing them to consider ESG factors, such as the costs and impacts of climate change.

“Retirement plans should be able to take into account environmental, social and governance factors, which can significantly affect investment profits. Ignoring the impact that issues like climate change have on a company’s bottom line can result in financial losses for retirees.” Raoul said. “Hardworking employees planning for retirement in Illinois and across the country deserve to know that their investments are based on a comprehensive assessment of their likely returns.”

For many people who work in the private sector, employee benefit plans such as a 401(k) can make up the majority of their retirement savings. Consideration of ESG factors can make a significant difference in the value of their savings and financial security in retirement.

For example, rising temperatures and frequent severe weather already damage infrastructure, disrupt businesses, and threaten public health in Illinois and across the United States. This has impacted a wide range of industries, including those fiduciaries might consider investing in.

In their letter, Raoul and the coalition said:

• The rule’s recognition of the potential relevance of ESG factors to investment evaluations is supported by strong data.
• During the 60-day public comment period before the rule was finalized, more than 97% of stakeholders supported the DOL proposal that became the rule.
• Opposition to the rule is part of a year-long campaign to obscure the truth that ESG factors affect businesses’ bottom lines.

In submitting the letter, Attorney General Raoul was joined by the attorneys general of Arizona, California, Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, Michigan, Minnesota, North Carolina, New Jersey, New Mexico, Nevada, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington.

Original source can be found here.