So much for ESG funds as an option in ERISA plans. Meet DOL's new proposed rule:

https://www.dol.gov/sites/dolgov/files/ebsa/temporary-postings/financial-factors-in-selecting-plan-investments-proposed-rule.pdf

Note that under this interpretation, even if an ERISA beneficiary prefers to sacrifice return in favor of social goals upon full disclosure, the fund may not be included as an option in a 401k menu.

As for ERISA fiduciaries, who previously were counseled they could use social factors as a tie-breaker, well

I've blogged about use of ESG criteria in ERISA plans before, and how the Trump administration was trying to limit its use - https://lawprofessors.typepad.com/business_law/2018/06/esg-and-erisa.html

and

https://lawprofessors.typepad.com/business_law/2019/05/the-trump-administration-versus-the-supreme-court.html

But the new proposed regs go further than guidance and actually codify the change.

Mutual fund sponsors are racing to satisfy a demand for ESG funds, so they're proliferating right now. A lot of the time, these funds aren't clear on whether ESG is an investment strategy or an impact/ethical one, which the SEC is investigating:
https://lawprofessors.typepad.com/business_law/2019/12/what-is-esg-anyway.html

See also:
https://www.sec.gov/rules/other/2020/ic-33809.pdf

The Trump admin is now making it much harder for ESG funds to be on the menu in 401k plans. What will that do to the market?

Not many 401k plans offer ESG options now, but some do, and there's been a big push for greater inclusion of them.
(For the record, as I blogged, I am very concerned about greenwashing, but that's different from functionally barring even "good" ones)
https://lawprofessors.typepad.com/business_law/2019/12/what-is-esg-anyway.html

Relevant text of proposed rule:

Further

Also, just to highlight the significance of the proposal: it's clear that ERISA fiduciaries must maximize plan wealth, thus putting the kibosh on proposals (like @DHWebber1's, like Strine's) that institutions consider beneficiary welfare overall (health, safety, jobs, etc):

And let's be clear this isn't just about buying and selling; it's also about voting decisions and SH engagement.

So, put it together with the SEC's proposed limitations on 14a-8, and there's a theme here, and it's that shareholders should not concern themselves with corporate social performance.

https://www.sec.gov/rules/proposed/2019/34-87458.pdf