Herein lies the potential for a direct conflict of interest. This applies generally to all proxy voting in commingled portfolios.
Tag "ESG"
To make the procedure more agonizing, the transition away from Chevron may feel like death by a thousand cuts. But the snail-like process of the courts has its benefits.
The root of these broader fiduciary concerns lies within the domain of compliance. Everything derives from what the regulators require, what any DOL audit might look at, and what might pique the interest of class-action attorneys.
While this might ruffle the feathers of ESG activists, those responsible for the day-to-day work of picking stocks have the real-world experience to fully understand where Buffett is coming from.
The Biden Rule, like the Trump Rule, does not encourage or discourage the use of ESG criteria when selecting investments. This allows fiduciaries to either adopt ESG principles or ignore them.
Just as these changes come bearing down, so, too, does a need for greater hand holding. Pressures within the provider industry, however, appear to be reducing the number of available hands.
Should the platform offer ESG doesn’t necessarily mean good news for the 401k plan sponsor. Including ESG funds might introduce other risks.