sacramento — California Attorney General Rob Bonta today celebrated President Biden’s veto of a joint resolution that would impair retirement savings for American employees. ) rules and makes clear that the trustees of private sector employee retirement plans, such as 401(k) plans, can consider environmental, social, and governance considerations (investment ESG) factors in making decisions. Attorney General Bonta led a coalition to overrule the resolution in a letter outlining how ESG factors, particularly the costs and impacts of climate change, have a material impact on investment savings.
“In California, we believe that information is power and that investors cannot make informed decisions without all the data and information in front of them.” Attorney General Bonta said:“I appreciate the actions of President Biden today in rejecting the misguided and irresponsible proposal to withhold important information from those who manage US retirement accounts. Instead, it’s about making informed, common-sense decisions to protect your retirement savings and confront the realities and risks of the climate crisis.”
For many people who work in the private sector, employee benefit plans such as 401(k)s make up a large portion of their retirement savings. Considering ESG factors, like many others, can make a big difference in the value of savings and ultimately in the financial security of employees in retirement.
For example, in the last five years alone, extreme weather events caused or exacerbated by climate change, including hurricanes, wildfires, heat waves, and extreme droughts, have cost U.S. businesses nearly $600 billion. This has implications for a wide range of industries, including those that fiduciaries may consider investing in.