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What’s an ESG and how does it end up it my 401k?

ESG’s or as the acronym implies Environmental, Social and Governance funds are those focused on a holistic valuation of a company in terms of how it performs in these specific areas. Theoretically, it’s a noble pinnacle to achieve: implementing policies that favor mother earth, recognize social equality, and keeps customers, employees, and investors happy.

What’s not to like? . . .  unless you’re a fiduciary. Is this concept a friend or foe? There are many articles and stats citing that a company that can harness all these attributes logically, would be well run and inevitably a good investment – due to the leadership it would need to have in order to achieve such metrics.

I’ve provided the link to the news release by the U.S. Department of Labor from October 13th (2021) with an overview of the proposed ruling:

Yet, not so much about the benefits of an ESG,  is how it’s being legislated or by executive order. Two articles in the 401kSpecialist Magazine speak to this topic:

“The editorial, titled “Your New Woke 401(k),” pulled no punches, claiming, “Retirement plan sponsors won’t merely be allowed to prioritize climate and social factors in how they invest. They could be sued if they don’t. Workers won’t get much say because plans won’t be required to ‘solicit preferences’ on ESG.”[1]

Does this have our attention?  . . . the same source also stated:

“That was the topic of a breakout session [Monday morning] at the annual Wealth@wor(k)[2] conference in Nashville, Tenn., featuring advisor Alex Assaley of AFS 401(k) Retirement Services and Thomas Clark of The Wagner Law Group. The session covered where we’ve been, where we’re frozen right now, and where we might be going in the future.”[3]

And doesn’t that apply to everyone still working for the legal tender, which includes . . . SUNCOAST SOCIAL SECURITY ADVISORS providing a confidential and comprehensive analysis on when to claim your Retirement Insurance Benefits.






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