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Trump Plan to Block Green 401(k)s Stirs Fund Industry Fury

Fidelity Investments says the Labor Department proposal isn’t “well grounded or supported.”

U.S. Secretary of Labor Eugene Scalia.

U.S. Secretary of Labor Eugene Scalia.

Photographer: Joshua Roberts/Bloomberg

The world’s largest asset managers are speaking out against a Trump administration plan that would make it more difficult for them to incorporate environmental, social and governance factors when making investment decisions, a move that could limit green investing in 401(k) plans.

Fidelity Investments wrote in an 11-page letter to the U.S. Department of Labor that the proposal’s assumption that ESG investment strategies sacrifice returns, increase risks and promote goals unrelated to financial performance isn’t “well grounded or supported by much of the emerging data.” BlackRock Inc. said the recommendation is “overly prescriptive and burdensome.” State Street Global Advisors, Putnam Investments and Legal & General Investment Management are among numerous other firms that also oppose the plan.