In a stunning display of political gamesmanship, the US Labor Department issued an “interpretive bulletin” last week that “encouraged financial advisers to take a more active and vocal role in evaluating companies on their social and environmental positions, including climate change,” according to a recent ClimateWire article.
The DOL issued the new interpretive bulletin because of concerns that the current bulletin “has been read by some stakeholders to articulate a general rule that broadly prohibits ERISA plans from exercising shareholder rights, including voting of proxies, unless the plan has performed a cost-benefit analysis and concluded … that the action is more likely than not to result in a quantifiable increase in the economic value of the plan’s investment.”
In other words, the DOL is concerned that by basing their decisions on how to invest other people’s pension funds on a cost-benefit analysis, many financial advisors are not considering “investment strategies that take into account environmental, social and governance (ESG) factors,” including “plans on climate change preparedness and sustainability.”
This latest interpretive bulletin is designed to allow financial advisors to take into account the hypothetical impact of climate change on the future value of oil and natural gas company stocks, even if these decisions will hurt the value of the stock portfolio—which is the leading strategy of environmental activists groups like Ceres. In fact, the bulletin actually cites the Investment Network for Climate Risk, an NGO created by Ceres to advance their global divestment movement, to support their case.
If it wasn’t clear enough that this latest interpretive bulletin was designed to make it easier for environmental activists to coerce financial advisors and fund managers to divest from oil and natural gas companies, the bulletin also cites a survey by the US SIF Foundation, whose mission is to “rapidly shift investment practices towards sustainability” through such means as “divesting from fossil fuels” and “investment in renewable energy and energy efficiency.”
It’s truly unfortunate that the Department of Labor has joined extremists in privileging activist agendas above optimizing the pensions of those who have served our country.