The Employee Benefits Security Administration (EBSA) has issued new guidance for fiduciaries on proxy voting, shareholder engagement, and economically targeted investments.

EBSA notes that Field Assistance Bulletin (FAB) No. 2018-01 clarifies prior guidance that instructed fiduciaries not to sacrifice investment returns or assume greater investment risks as a means of promoting collateral social policy goals. 

The FAB covers other issues raised by environmental, social, or corporate governance (ESG) related investments in 401(k) plans, including the inclusion of ESG factors in an investment policy statement, selection of an ESG-themed qualified default investment alternative (QDIA), and use of plan expenses to initiate or actively sponsor proxy fights on environmental or social issues.

The text of FAB 2018-01 is posted here.

An EBSA press release on the guidance is posted here.

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