Insights
Kent Mason Featured in Pensions & Investments Article Discussing Department of Labor Proxy-Firm Guidance and the End of the ESG Tiebreaker Test
- Published Date: April 29, 2026
On April 28, 2026, Pensions & Investments published an article titled, “New DOL proxy guidance signals end of ESG tiebreaker test, legal experts say,” where Davis & Harman Partner, Kent Mason, was quoted explaining that the guidance implies that relying on ESG, even as a tie-breaker, may violate ERISA duties in DOL’s view.
On April 1, 2026, the Department of Labor (DOL) issued a technical release providing guidance regarding proxy advisory services. The release contains language that some legal experts are interpreting as the end of the tiebreaker test that permits ERISA fiduciaries to consider environmental, social, and governance (ESG) factors when making investment decisions. Specifically, the release states that “ERISA’s fiduciary duties require that actions be taken with respect to a plan investor only for the purpose of maximizing risk-adjusted financial return.”
Mason is quoted stating “This was implying, I think, very strongly, that you can’t use ESG as a tiebreaker. Unless ESG helps increase returns, you can’t use it at all, because the guidance says if you use it, then you’re violating your ERISA duties.”
A link to the article can be found here.
