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week ending July 17th, 2020 Interest in environmental, social and governance (ESG) investing is growing among investors, perhaps more so now that improvements in the effects of climate change were seen during lockdowns caused by the COVID-19 pandemic and the events of this year have increased focus on diversity and inclusion. In previous guidance from the Department of Labor (DOL) it seemed amenable to including ESG factors in decisions about retirement plan investments; however, it has recently proposed a regulation that seems to dial back its stance. Whatever becomes of the proposed regulation, plan sponsors will need to be able to justify and document the selection of any ESG-related investments. Enjoy this edition of PLANSPONSOR Weekend! Editor's Choice Investing Pandemic Shines a New Light on Climate Change and ESG Investing The COVID-19 crisis is showing plan sponsors how corporate behaviors affect the environment and that encouraging positive ones with investment dollars can benefit participants as well. Compliance DOL ESG Proposal Throws a Cloud Over Prior Guidance The proposed regulation seems to create stricter limits for ESG investing in retirement plans, but experts say it is not all doom and gloom for plan sponsors and participants who want these investments. Investing Lack of Track Records Hinder ESG Investing Additional conclusive information about environmental, social and governance (ESG) investment performance may help retirement plan sponsors be less wary about making ESG investment decisions. Investing Providers Look to End the ESG Performance Debate According to Mike Hunstad at NTAM, it may take some time for the retirement industry in the U.S. to fully embrace ESG as a positive-performance factor, but he says it’s already a best practice to think about ESG from a risk-management perspective. Investing ESG Investments a Good Option for Retirement Plans Performance is not sacrificed by investing in environmental, social and governance (ESG) investments, and plan sponsors and participants can align their financial goals with their values, a white paper argues. Investing Understanding How ‘E,’ ‘S’ and ‘G’ Contribute to ESG Performance Investors need to know which factors will help them achieve their long-term and their short-term goals. Popular Reads Compliance New Financial Audit Rule Increases Requirements for Plan Sponsors Plan sponsors will be required to provide much more data, as well as certifications about plan administration and governance, and limited-scope audits will no longer be so limited. Research 2021 Recordkeeping Survey Data and Research Participants Missing the Full Match Remains a Big Problem A new survey shows there are several reasons employees decide not to contribute to their retirement plans. Compliance Aon Wins Lawsuit Over Investments in Lowe’s Cos. 401(k) A judge found Aon didn’t violate ERISA when encouraging Lowe’s to change the plan’s investment menu or by selecting and maintaining a proprietary fund for the plan that underperformed. Compliance 2021 HSA Review: Plan Sponsor Duties With Regard to HSAs Experts shared what responsibilities employers have for their HSA benefit and what actions can trigger ERISA governance of it. Did someone forward you this newsletter? Sign up here to get PLANSPONSOR Weekend directly in your mailbox!

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