Labor Department headquarters in Washington. (Photo: Mike Scarcella/ALM)
The U.S. Labor Department has undertaken a full-court press against environmental, social and governance focused investments in retirement plans.
It has not only proposed a rule that would limit the use of ESG funds in 401(k) plans, but has also sent enforcement letters to RIA firms and plan sponsors asking for detailed information about their use of ESG funds in retirement plans over several years.
Financial Advisor magazine first reported on the enforcement letters to RIA firms, and ThinkAdvisor has confirmed with two sources that firms have received such letters, but their distribution appears to be limited.
The letters from Labor's Employee Benefits Security Administration (EBSA) reportedly ask recipients to provide information about their firms' ESG investment decisions, including their investment and fiduciary policies and procedures, meeting minutes, communications, performance data and names of any staff members with input into those decisions.
Firms were reportedly given two weeks to provide such data covering the past five years.
Labor has not responded to ThinkAdvisor's requests for comment on these letters.
The department sent similar letters in early May to retirement plan sponsors, which was reported by Plan Sponsor Council of America.
