New ESG Proposed Rule at OMB

The Office of Management and Budget (OMB) received a proposed rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, from the Department of Labor. The new rule is expected to replace the Biden era rule of the same name, commonly referred to as “the ESG rule”. While that rule provided for environmental, social, and governance (ESG) considerations as a tiebreaker if two investment options offered the same rate of return, a new rule is likely to resemble a previous rule under the first Trump administration that provided plan fiduciaries only need consider financial factors when selecting investments.