On October 22, 2015 the Department of Labor (DOL) issued Interpretive Bulletin (IB) 2015-01 to 
clarify its views concerning a plan fiduciary’s decision to invest plan assets in “economically targeted investments” (ETIs). ETIs are generally defined as investments that are selected for the collateral social or economic benefits they create, in addition to or apart from the investment return to the employee benefit plan. In this document, the DOL withdraws IB 08-01 and reinstates the language of IB 94-01.
The DOL explained in the preamble to IB 2015-01 that it believes that in the seven years since its publication, IB 2008-01 has unduly discouraged fiduciaries from considering ETIs. In particular, the DOL is concerned that the 2008 guidance was dissuading fiduciaries from pursuing investment strategies that consider environmental, social, and governance factors, even where they are used solely to evaluate the economic benefits of investments and identify economically superior investments, and investing in ETIs even where economically equivalent.
The DOL has consistently stated that the focus of plan fiduciaries on the plan’s financial returns and risk to beneficiaries must be paramount. Under ERISA, the plan trustee or other investing fiduciary may not use plan assets to promote social, environmental, or other public policy causes at the expense of the financial interests of the plan’s participants and beneficiaries. Fiduciaries may not accept lower expected returns or take on greater risks in order to secure collateral benefits.
However, the DOL points out in the updated guidance that “ERISA does not direct an investment choice in circumstances where investment alternatives are equivalent, and the economic interests of the plan’s participants and beneficiaries are protected if the selected investment is in fact, economically equivalent to competing investments.” The DOL advises fiduciaries not to treat commercially reasonable investments as inherently suspect or in need of special scrutiny merely because they take into consideration environmental, social, or other such factors. Furthermore, when a fiduciary prudently concludes that such an investment is justified based solely on the economic merits of the investment, the DOL says there is no need to evaluate collateral goals as “tiebreakers”. In addition, the Department does not construe consideration of ETIs criteria as presumptively requiring additional documentation or evaluation beyond that required by fiduciary standards applicable to plan investments generally.