Taking Stock

 Under the Employee Retirement Income Security Act of 1974 (ERISA), a fiduciary must discharge his or her responsibility “solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits to participants and their beneficiaries” and “with the care, skill, prudence, and diligence” that a prudent person “acting in a like capacity and familiar with such matters would use.” In her May Illinois Bar Journal article, “Taking Stock,” Samantha J. McHugh notes that disputes arise when parties disagree on what is in the interest of participants and what a prudent person would do when acting in a like capacity. One ongoing dispute is the incorporation of environmental, social, and governance (ESG) factors into investment decision-making. Some consider these factors essential to assessing risk and performance while others deem their inclusion outside the scope of fiduciary duty. In her article, McHugh details some of the arguments concerning ESG investing, examines how investment fiduciaries can find protection under existing law to consider ESG factors when making investment decisions on others’ behalf, and describes how Illinois law handles the incorporation of these factors when investing public funds.

 Read the May Illinois Bar Journal’s article, "Taking Stock"