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Biden Scraps Trump’s Roadblock for 401(k) Investments in ESG

  • Labor Department says it won’t enforce rules passed last year
  • Agency plans new regulations that value social investing
Joe Biden
Joe BidenPhotographer: Al Drago/Bloomberg

The Biden administration is scuttling rules put in place during the last days of Donald Trump’s presidency that many fund managers viewed as a direct attack on socially responsible investing.

A division of the Labor Department announced Wednesday that it wouldn’t enforce regulations approved last year by the Trump administration that required pension funds and 401(k) plans to place economic interests ahead of all other goals. The rules created a roadblock to pursuing what’s known as environmental, social and governance investments, or ESG. Such strategies are on the rise, with fund giants including BlackRock Inc. pledging to do more to fight climate change and promote diversity.