In mid-2020, the Department of Labor issued a proposed regulation titled “Financial Factors in Selecting Plan Investments.” Despite the generic name, the proposal was widely seen as an effort to regulate the use of environmental, social and governance factors in selecting investments for ERISA-governed retirement plans. The Republican-led DOL believed that the use of ESG factors was being done for social and political purposes without regard to the impact on retirement investors. However, in the eyes of many in the investment community, the DOL perception was woefully outdated; instead, investment managers contended that in many, if not most, cases ESG factors are now being used to enhance investment returns and/or to reduce risk.
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The views expressed here are those of Fred Reish. They should not be construed as investment advice or as the views of Hartford Funds or the employees of Hartford Funds. They are based on available information and are subject to change without notice. The information above is intended as general information and is not intended to provide, nor may it be construed as providing, tax, accounting or legal advice. As with all matters of a tax or legal nature, please consult with your tax or legal counsel for advice. This material and/or its contents are current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Fred Reish.