PRI Comments on Pending Department of Labor Regulations on Proxy Measures, ESG
PRI Senior Fellow in Business and Economics Dr. Wayne Winegarden has submitted comments to the Department of Labor commenting on proposed amendments to federal regulations that would confirm the fiduciary responsibility of plan sponsors regarding “proxy voting and other exercises of shareholder rights.”
In the letter, Winegarden notes that the regulations would ensure that the managers of private pension funds adhere to their fiduciary responsibility when voting on proxy measures, which he says is especially important given the expansion of the number of Environmental, Social, and Governance (ESG) proxy proposals that are considered under the proxy process.
A 2019 study by Winegarden found that a $10,000 ESG portfolio would be 43.9 percent smaller compared to an investment in a broader, S&P 500 index fund. Just one fund would beat the earnings of an S&P 500 investment over 5 years, and just two would beat it over a 10 year period.