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Prathapan Bhaskaran 6:50 am ET
The Labor Department’s recent proposal to make it easier forinvestors to buy funds focused on ESG (environmentally sound, sociallyresponsible and transparently governed) companies in their 401(k) plans promises to be a boost for socially responsible investments.
This is particularly important at a time when global communities are starting at climate change and the world population and economy are emerging from the effects of the COVID-19 pandemic.
ESG funds are becoming increasingly popular as more peoplewant to invest in companies that align with their values regarding environment,climate change, social responsibility and administrative and financialtransparency.
Lower broker fee
The broker fee on these types of funds is often lower onthe Wall Street when compared to other asset classes. Sustainable funds chargean average of 0.61% of assets, compared to 0.41% for ESG.
Biden administration’s proposal that will undergo a 60-daycomment period before acceptance can reverse a Trump administration rule thatmade it more difficult for 401(k) plans to invest based on ESG measures.
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