ESG and ERISA’s Fiduciary Duties: Past and Future Evolution of the Statute’s Requirements
ABSTRACT
As society changes, the law evolves to reflect societal shifts in attitudes and values. When the Employee Retirement Income Security Act (ERISA) was passed in 1974, the world was a much different place than it is today. This is especially true in the investment industry where, in the past few decades in particular, investors have become increasingly interested in putting their money toward causes and funds that reflect their personal beliefs. The recent advent of Environmental, Social, and Corporate Governance (ESG) investing has called into question the contemporary definition of ERISA’s fiduciary duty requirements and their impact on a retirement plan fiduciary’s ability to cultivate collateral benefits on behalf of plan participants with nonpecuniary interests. This note examines whether the statutory language under ERISA permits fiduciaries to consider retirement plan participants’ desired collateral benefits when crafting plan offerings, the barriers to such an interpretation, and the path forward in the evolution of ERISA’s statutory interpretation.