The Biden administration has quietly finalized a rule allowing employers to funnel workers’ 401(k) funds into investments that support woke causes that address issues such as climate change and diversity.
The Labor Department recently approved the rule affecting roughly 150 million workers and $10 trillion in assets covered under the Employee Retirement Income Security Act of 1974.
The rule says asset managers and retirement plan administrators should consider environmental, social and corporate governance (ESG) factors when selecting investments.
That would encourage money managers to balance financial returns with investments that support wind and solar energy or have diverse boards of directors.