DOL Releases RFI on Possible Agency Actions to Protect Life Savings and Pensions from Threats of Climate-Related Financial Risk

YATINDRA PANDYA, May 26, 2022 

On February 14, 2022, the Department of Labor (DOL) Employee Benefits Security Administration (EBSA), which is responsible for administering, regulating and enforcing the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), published a Request for Information on Possible Agency Actions to Protect Life Savings and Pensions from Threats of Climate-Related Financial Risk (the RFI). The RFI sought public comments on EBSA’s future work to protect the retirement savings and pensions of U.S. workers and families from potential risks that may result from climate change and that could potentially impact the safety and soundness of financial institutions and investments. The RFI sought input on actions EBSA can take under ERISA, the Federal Employees’ Retirement System Act of 1986 (FERSA), and any other relevant laws. This article discusses the RFI as it relates to ERISA plans, including implications for resulting future EBSA actions.

Background on the Biden Administration’s Attention to Climate-Related Risk

The RFI follows a series of climate-related executive orders issued by the Biden Administration. On his first day in office (January 20, 2021), President Biden issued Executive Order 13990 on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, which sets forth the administration’s policy to listen to science, improve public health, protect our environment, and bolster resilience to the impacts of climate change. 

Subsequently, on May 20, 2021, President Biden issued Executive Order 14030 on Climate-Related Financial Risk (“Executive Order 14030”), in which he articulated this policy, as follows:

It is therefore the policy of my Administration
to advance consistent, clear, intelligible,
comparable, and accurate disclosure of
climate-related financial risk…

Executive Order 14030 outlined the administration’s approach to developing a government-wide strategy to advance public disclosure of climate-related financial risk in order to mitigate the systemic risks posed by climate change to families, businesses and the economy. Executive Order 14030 directs the Secretary of Labor to identify actions that may be taken under ERISA, FERSA, and other relevant laws, to protect the life savings of U.S. workers and families from the threats of climate-related financial risk. The DOL issued the RFI pursuant to this directive.1

Roadmap to Build a Climate-Resilient Economy

In order to advance the general objectives of Executive Order 14030, on October 15, 2021, the Biden administration released a report entitled A Roadmap to Build a Climate Resilient Economy (the “Roadmap”). The Roadmap provides “a comprehensive, government-wide strategy to measure, disclose, manage, and mitigate the systemic risks climate change poses to American families, businesses, and the economy,” including a strategy to protect life savings and pensions from climate-related financial risk and to “set a floor for regulatory, voluntary, and government public management action to address climate-related financial risk.” 

The Roadmap explains that 54% of American workers participate in employer-provided retirement, representing $12.5 trillion in assets potentially at risk, and that the DOL, through regulation under ERISA, is responsible for leading the effort to enhance the resilience of life savings and pensions in the face of climate-related risks and opportunities.

The Roadmap characterizes “climate-related financial risk” as encompassing two broad categories: physical risks (i.e., risks to infrastructure and production resulting from climatological events), and transition risks and opportunities (i.e., opportunities for financial growth stemming from efforts to combat underlying causes of climatological events). The Roadmap explains that physical risks to assets, publicly traded securities, private investments and companies are increasing in frequency and severity, and notes that physical and economic damage from climate-related extreme weather has cost $600 billion over the last five years. The Roadmap also describes that the global shift away from carbon-intensive economies presents transition risk and opportunity. The Roadmap notes that “[t]he failure to appropriately and adequately account for, disclose and measure these physical and transition risks threatens the competitiveness of U.S. companies and markets, the life savings and pensions of U.S. workers and families, and the ability of U.S. financial institutions to serve communities.” (Emphasis added.)

Request for Public Comment

Following the goals established by Executive Order 14030 and the Roadmap, the RFI consists of 22 distinct requests for public comment, the following eight of which relate to ERISA governed plans:


  1. Agency actions. The DOL requested comment on any agency actions that may be taken under ERISA to protect the life savings and pensions of U.S. workers and families from threats of climate-related financial risk.
  2. Climate-related financial risk. The DOL requested comment on the most significant climate-related financial risks to retirement savings under the broad categories of physical risks and transition risks.

Data Collection Regarding ERISA-Covered Plans

  1. Data collection on climate-related financial risk. The DOL asked whether EBSA should collect data on climate-related financial risks, and if so, the type, source, and the method that EBSA should use to collect such data. 
  2. Form 5500 Annual Return/Report. The DOL asked if Form 5500 (the annual return for employee benefit plans) should be used to collect data on climate-related financial risks to pension plans, and if so, the manner in which Form 5500 should be used, the type of information collected, and how such information would help protect pensions.  
  3. Information request/survey and other data collection methods. The DOL also asked for ways to collect data by means other than using Form 5500, and for comment on whether and how such data should be categorized; for example, surveys directed to plan fiduciaries to gauge their awareness of climate-related risks to their participants’ pensions.
  4. Alternatives to Form 5500 for timelier reporting. The DOL asked for comment on a potential new reporting regime, specific to climate-related financial risks, that is timelier and more easily accessible to the public than Form 5500, and which could possibly shed light on the steps taken by plans and the results of such steps. 

ERISA Fiduciary Issues

  1.  Plan fiduciaries’ use of market metrics/tools for evaluating ESG (environmental, social, and governance) performance. The DOL requested comment on the best sources of information plan fiduciaries may use in evaluating risks to plan investments, as well as the challenges of obtaining such information and comparing to other metrics.
  2. Guaranteed life products. The DOL requested comment on whether lifetime annuities could be helpful in transferring climate-related financial risks from participants to insurers/guarantors, whether there are climate-related annuity products available, and whether and how EBSA could facilitate the provision of such products.

Other Requests for Public Comment

  1. EBSA sponsor and publish research. The DOL asked if EBSA should sponsor and publish research that helps plan fiduciaries evaluate climate-related financial risks, and which research subjects it should focus on.
  2. EBSA efforts to educate participant-directed investors and to coordinate with the Securities and Exchange Commission to avoid “green washing.”3 The DOL requested comment on whether there is a need to educate plan participants who make their own investment choices, and whether it should work with the Securities and Exchange Commission to protect participants from misleading statements by funds regarding exposure to climate-related financial risks.

Implications of the RFI

The RFI makes it clear that the DOL wants to better understand key climate-related risks to retirees’ savings, as well as how it may use its interpretive authority under ERISA, including with respect to the fiduciary duties of prudence and loyalty, to address such risks. It is also apparent that the DOL anticipates using both monitoring and enforcement mechanisms to effectuate the policies it may develop. We can expect the DOL to release regulatory or sub-regulatory guidance addressing climate-related risks, with possible related reporting and disclosure requirements and future enforcement practices.

By framing the discussion in terms of physical and transition risks, and especially by including the concept of transition opportunities, the regulatory and enforcement changes that may occur as a result of the RFI could potentially direct some portion of the $12.5 trillion in retirement assets toward long-term investments in companies and new opportunities that would have the effect of reducing climate-related risk. In addition to safeguarding retirees’ savings, such investment flows could potentially serve to mitigate or otherwise address the negative effects of climate change.

Plan fiduciaries should expect future action from the DOL regarding A) changes to plans’ reporting obligations related to risks posed by climate change, and B) a stronger fiduciary framework for enforcing policies and practices that take into account climate-related risks and opportunities.

Public Comment Period Closed

The EBSA has collected a final round of public comments as of May 16, 2022, the final day of the public comment period. We anticipate discussing any proposed action from the DOL, including any response to the last round of public comments, in a future article.



1  In a related effort, President Biden also ordered the Secretary of Labor to review the investment duties regulation published by the prior administration as it relates to environmental, social and governmental investments, resulting in a proposed regulation issued by the Secretary on October 14, 2021. The proposed regulation emphasizes that fiduciaries may consider climate change and other environmental, social and governance (ESG) factors when they make investment decisions and exercise shareholder rights. Our overview of that proposed regulation can be accessed here. 

2  The RFI includes the following examples of information Form 5500 could be used to collect: how plan investment policy statements specifically address climate-related financial risk; whether service providers disclose or meet metrics related to financial risks; whether, and how, plans have factored climate-related financial risk into their analysis of individual investments or investment courses of action, and; whether, and how, plan fiduciaries voted on proxy proposals involving climate-related financial risk.

3  The RFI describes “green washing” as potentially misleading statements about fund adherence to policies that address climate-related financial risk. The RFI also references an SEC Risk Alert, in which the SEC stated that during examinations of investment advisers, registered investment companies, and private funds engaged in ESG investing, the staff observed some instances of potentially misleading statements regarding ESG investing processes and representations regarding the adherence to global ESG frameworks. (See SEC Division of Examination Risk Alert: