The Employee Benefits Security Administration (EBSA), part of the Department of Labor, submitted a proposed rule to the Office of Information and Regulatory Affairs (OIRA) on June 30, 2026. The proposed rule would restrict plan fiduciaries from prioritizing environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) factors when selecting investments and exercising shareholder rights, reversing Biden-era guidance that permitted such considerations alongside financial metrics.
The EBSA drafted the rule in response to a February 2025 executive order from President Donald Trump (R) directing federal agencies to review regulations that exceed statutory authority or implicate matters of social, political, or economic significance without clear congressional authority.
The proposed rule would replace guidance the Biden administration issued on ESG investing within ERISA retirement plans — 401(k)s, pension plans and similar accounts covering millions of workers.
