Yesterday, the Trump Labor Department (DOL) asked the U.S. Fifth Circuit Court of Appeals to hold in abeyance the appeal over the legality of the Employee Benefits Security Administration’s SWACCA-supported November 2022 final rule on “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.” DOL said that it “has determined that it intends to reconsider the challenged rule, including by considering whether to rescind the rule.”
The final rule allows plan fiduciaries to consider climate change and other environmental, social and governance factors—including whether a project will generate work hours for plan participants—when they select plan investments and exercise shareholder rights, such as proxy voting. This Biden-era rule reversed a regulation from Trump’s first term that prohibited such considerations. Judge Kacsmaryk of the Northern District of Texas has twice upheld the final rule that is currently on appeal.