Congressman Andy Levin, D-Michigan is drafting legislation that has the potential to open the floodgates for socially responsible investments in retirement accounts.
The bills — there are two to amend existing laws — would require investment fiduciaries to take into account environmental, social and governance factors when making investment decisions.
The approach is in sharp contrast to the one adopted by the current Labor Department that recently finalized rules that make it more difficult for 401(k) plans to include ESG investments in their investment options and forbids their use as the default options in plans.
(Related: Labor Finalizes Controversial ESG Rule)
Levin’s bills, which were first reported by Investment News, would amend the Investment Advisers Act and the Employee Retirement Income Security Act (ERISA).
The Congressman, who has been mentioned as a potential candidate for Labor Secretary in the incoming Biden Administration, plans to introduce the bills — known as the Sustainable Investment Policies Act and the Retirees Sustainable Investment Policies Act — in the current Congress and again in the next one.