I 

117TH CONGRESS 

1ST SESSION H. R. 3604 

To amend the Employee Retirement Income Security Act of 1974 to enable 

consideration and disclosure by retirement plans of Sustainable Investment Policies. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 28, 2021 

Mr. LEVIN of Michigan (for himself, Mrs. AXNE, Mr. BRENDAN F. BOYLE

of Pennsylvania, and Mr. GARCI ́A of Illinois) introduced the following bill; 

which was referred to the Committee on Education and Labor 

A BILL 

To amend the Employee Retirement Income Security Act 

of 1974 to enable consideration and disclosure by retirement plans of Sustainable Investment Policies. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Retirees Sustainable 

5 Investment Opportunities Act of 2021’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) There is now incontrovertible evidence that 

9 environmental, social, and governance (hereinafter in 


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1 this Act referred to as ‘‘ESG’’) factors can have ma2 terial and substantial effects on investment perform3 ance. 

4 (2) The United States Department of Labor 

5 which is responsible for administering and enforcing 

6 the Employee Retirement Security Act of 1974 has 

7 historically recognized that retirement plans may 

8 make economically targeted investments (‘‘ETIs’’), 

9 that is, investments that offer the potential for eco10 nomic benefits, such as local job creation, commu11 nity economic development, and affordable and 

12 workforce housing construction, in addition to in13 vestment returns, provided such investments other14 wise comply with ERISA’s fiduciary requirements. 

15 (3) ESG and ETI-related factors are referred 

16 to in this Act as ‘‘sustainability considerations’’ and 

17 investments guided by sustainability considerations 

18 are referred to as ‘‘sustainable investments.’’ Sus19 tainable investments have the potential to contribute 

20 to the long-term well-being and resilience of individ21 uals and communities in this nation and around the 

22 world while earning investment returns comparable 

23 to or better than investments with similar risk that 

24 do not take these factors into account. 


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1 (4) Sustainable investing is now among the 

2 fastest growing segments of the investment industry 

3 with broad and growing interest from both indi4 vidual investors and institutional asset managers. 

5 Nevertheless, sustainable investments are virtually 

6 absent from ERISA-regulated retirement plans in 

7 the United States. 

8 (5) Retirement plans and participants in indi9 vidual account retirement plans should have the op10 portunity to make and hold sustainable investments, 

11 provided ERISA’s fiduciary requirements are other12 wise met. 

13 (6) Accordingly, fiduciaries for retirement plans 

14 should— 

15 (A) incorporate all relevant factors, includ16 ing sustainability-related factors, into invest17 ment analysis and decision-making processes, 

18 consistent with the investment time horizons of 

19 plan participants and beneficiaries; 

20 (B) be permitted to consider factors rel21 evant to sustainability, whether or not they can 

22 be demonstrated to be financially material, pro23 vided doing so does not diminish anticipated in24 vestment returns or increase investment risk 


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1 and is otherwise consistent with ERISA’s fidu2 ciary requirements; 

3 (C) encourage the adoption of best prac4 tices for sustainability performance and sustain5 ability impacts in the companies or other enti6 ties in which they invest; 

7 (D) consider plan participants’ and bene8 ficiaries’ sustainability-related interests and 

9 preferences when making investment decisions; 

10 (E) consider the impact of plan invest11 ments on the stability and resilience of the fi12 nancial system and on broad market returns as 

13 a result of the sustainability characteristics of 

14 those investments; 

15 (F) consider participation in shareholder 

16 engagement and proxy activities, policy advo17 cacy and similar actions based on sustainability 

18 considerations; and 

19 (G) disclose how they have implemented 

20 these commitments. 

21 SEC. 3. PURPOSE. 

22 The purpose of this Act is to enable retirement and 

23 welfare benefit plans and participants in individual ac24 count retirement plans that are covered by the Employee 

25 Retirement Income Security Act of 1974 (29 U.S.C. 1001 


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1 et seq.), to make and hold sustainable investments, con2 sistent with the fiduciary standards, requirements, and 

3 procedures of said Employee Retirement Income Security 

4 Act. 

5 SEC. 4. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN6 COME SECURITY ACT OF 1974. 

7 (a) DISCLOSURE OF SUSTAINABLE INVESTMENT

8 POLICIES.—Section 102 of the Employee Retirement In9 come Security Act of 1974 (29 U.S.C. 1022) (‘‘ERISA’’) 

10 is amended in subsection (b), by inserting ‘‘a statement 

11 of whether or not the plan has adopted a sustainable in12 vestment policy pursuant to section 402(b)(5) of ERISA;’’ 

13 after ‘‘collective bargaining agreement;’’. 

14 (b) ESTABLISHMENT OF SUSTAINABLE INVESTMENT

15 POLICY.—Section 402 of the Employee Retirement In16 come Security Act of 1974 (29 U.S.C. 1102) is amend17 ed— 

18 (1) in subsection (b)— 

19 (A) in paragraph (3), by striking ‘‘and’’; 

20 (B) in paragraph (4), by striking the pe21 riod and insert ‘‘, and’’; and 

22 (C) by inserting after paragraph (4) the 

23 following: 

24 ‘‘(5) adopt a sustainable investment policy of 

25 the plan in accordance with subparagraph (d), proVerDate Sep 11 2014 00:30 Jul 20, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604

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1 vided a plan may elect not do so if it gives notice 

2 to plan participants or beneficiaries in writing of 

3 such election’’; and 

4 (2) by adding after subsection (c) the following: 

5 ‘‘(d)(1) A sustainable investment policy under sub6 section (b)(5) shall address sustainability considerations 

7 including, without limitation, the following: 

8 ‘‘(A) Economically targeted investment consid9 erations including, the potential for achieving eco10 nomic benefits, such as local job creation, commu11 nity economic development, and affordable and 

12 workforce housing construction, in addition to in13 vestment returns. 

14 ‘‘(B) Social considerations including— 

15 ‘‘(i) characteristics of workforces employed 

16 by entities in which the plan invests, including 

17 compensation and benefits, health and safety, 

18 diversity and demographics, skills and training, 

19 retention and turnover, full-time and part-time 

20 employment, and the use of independent con21 tractors; 

22 ‘‘(ii) labor and human rights compliance by 

23 entities in which the plan invests, including 

24 workers’ freedom of association, the right to 

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1 ployment discrimination, child labor, and forced 

2 labor in company operations and supply chains; 

3 ‘‘(iii) due diligence and practices regarding 

4 supply chain management, including environ5 mental, human rights, and worker compensa6 tion considerations; and 

7 ‘‘(iv) the implementation, to the extent 

8 practicable, of practices which enhance diversity 

9 and inclusion within the workforce, senior lead10 ership, business procurement, and philanthropy. 

11 ‘‘(C) Environmental considerations including— 

12 ‘‘(i) the potential to reduce and ultimately 

13 eliminate net greenhouse gas emissions associ14 ated with business activities and to mitigate ex15 posure to climate-related risks to the busi16 nesses, assets and properties of entities invested 

17 in by the plan; 

18 ‘‘(ii) the potential to mitigate other cli19 mate-related and associated environmental 

20 harms and risks, such as industrial pollution, 

21 habitat destruction, deforestation, species 

22 endangerment and extinction, and other forms 

23 of environmental degradation; 

24 ‘‘(iii) the potential to address and rectify 

25 issues of environmental justice and the inequiVerDate Sep 11 2014 00:30 Jul 20, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604

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1 table environmental impacts of certain business 

2 operations on historically disadvantaged com3 munities; and 

4 ‘‘(iv) the potential to provide workers af5 fected by the shift to a low carbon economy 

6 with a just transition by creating decent work 

7 and quality jobs. 

8 ‘‘(D) Governance considerations including— 

9 ‘‘(i) corporate governance practices by enti10 ties in which the plan invests, including execu11 tive compensation, board diversity, worker 

12 board representation and codetermination, the 

13 independence of board chairs, political spending 

14 and lobbying disclosure; and 

15 ‘‘(ii) tax practices of entities in which the 

16 plan invests, including international tax avoid17 ance strategies and tax payment disclosure. 

18 ‘‘(E) Other relevant economically targeted in19 vestment, environmental, social, and governance con20 siderations and factors. 

21 ‘‘(2) A plan shall be deemed to have adopted a sus22 tainable investment policy for the purposes of subsection 

23 (b)(5) if it incorporates the sustainability considerations 

24 set forth in subsection (d)(1) into a previously adopted 

25 investment policy of the plan or if the plan elects to be 


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1 governed by a sustainable investment policy otherwise 

2 meeting the requirements of subsection (d)(1) adopted by 

3 a third-party fiduciary to the plan. 

4 ‘‘(3) A plan that has adopted a sustainable invest5 ment policy pursuant to subsection (b)(5), including plans 

6 relying on subsection (d)(2), shall conduct a review of such 

7 policy on an annual basis.’’. 

8 (c) UTILIZATION OF CERTAIN SUSTAINABILITY CON9 SIDERATIONS.—Section 404 of the Employee Retirement 

10 Income Security Act of 1974 (29 U.S.C. 1104) is amended 

11 in subsection 404(a) by adding after subsection (2) the 

12 following: 

13 ‘‘(3) This subsection 404(a) shall not be con14 strued to prohibit a plan fiduciary from doing the 

15 following: 

16 ‘‘(A) In choosing among investments with 

17 comparable degrees of risk and rates of return, 

18 selecting one or more such investments based 

19 on one or more sustainability considerations as 

20 set forth in section 402(d)(1), regardless of 

21 whether such considerations are determined to 

22 be financially material. For the purposes hereof, 

23 the determination that investments have com24 parable degrees of risk and anticipated rates of 

25 return shall be a determination that a prudent 


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1 man acting in like capacity and familiar with 

2 such matters could reasonably be expected to 

3 make on a forward-looking basis. 

4 ‘‘(B) Incorporating sustainability consider5 ations into the monitoring of or decisions re6 garding the disposition of plan investments. 

7 ‘‘(C) Exercising proxy voting rights in ac8 cordance with the plan’s proxy voting guidelines 

9 which may include sustainability considerations. 

10 ‘‘(D) Considering as financially material to 

11 retirement benefits the potential for increased 

12 contributions to the plan resulting from a plan 

13 investment.’’. 

14 (d) INDIVIDUAL ACCOUNT PLANS.—Section 404 of 

15 the Employee Retirement Income Security Act of 1974 

16 (29 U.S.C. 1104) is amended in subsection 404(c)(1) by 

17 adding after subsection (C) the following: 

18 ‘‘(D) In selecting investment alternatives 

19 for individual accounts, including investment al20 ternatives meeting the requirements of section 

21 404(c)(5) of this title, a plan fiduciary may in22 clude investment alternatives selected in part on 

23 the basis of sustainability considerations as set 

24 forth in section 402(d)(1) regardless of whether 

25 such considerations are determined to be finanVerDate Sep 11 2014 00:30 Jul 20, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3604.IH H3604

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1 cially material, provided any such alternative is 

2 determined to have a degree of risk and antici3 pated rate of return comparable to other invest4 ments of similar type determined by the fidu5 ciary to be available and appropriate for inclu6 sion in the plan. For the purposes hereof, the 

7 determination that investments have com8 parable degrees of risk and rates of return shall 

9 be a determination that a prudent man acting 

10 in like capacity and familiar with such matters 

11 could reasonably be expected to make on a for12 ward-looking basis.’’. 

13 (e) ESTABLISHMENT OF SUSTAINABLE INVESTMENT

14 POLICY TECHNICAL ASSISTANCE PROGRAM.—Not later 

15 than 90 days after the date of enactment of this Act, the 

16 Assistant Secretary of Labor for Employee Benefits shall 

17 establish a technical assistance program to provide edu18 cational materials and technical assistance to plans to 

19 comply with the amendments made by this Act. 

Æ 


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