Labor Department is protecting public pensions from political investments

Over the past decade, a strategy known as Environmental, Social, and Governance, or “ESG investing,” has been pushed to the forefront as a tool by public officials and investment managers to promote environmental or social causes through pension fund investments. This requires special attention to making sure pension fund managers are bound by their fiduciary obligation to their beneficiaries and not acting from political motives.

Prioritizing issues other than pure financial returns may be an acceptable strategy for individuals managing their own money or for corporate officers contemplating the future of their company. But for fiduciaries, prioritizing any interest other than maximizing returns is a dereliction of duty.