The US Department of Labor has issued a proposed rule that would largely remove the restraints on the consideration of ESG factors by the 2020 rules “Financial Factors in Selecting Plan Investments” and “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights”. My comments – submitted today – are attached.

In these, I:

> highlight the importance of externalities (i.e. the impacts on third parties of investment actions) and the associated potential for market failure, and

> argue that policymakers and regulators have a responsibility to consider externalities in their rule-making, taking steps to align incentives appropriately and to ensure that the necessary conditions exist for markets to succeed by encouraging a long-term and responsible mindset throughout the investment community.