Why was the US Department of Labor's clarification of fiduciary duty in 2015 welcomed by the ESG investing industry?

The US Department of Labor's clarification of fiduciary duty in 2015 was significant for the ESG investing industry because it allowed pension plans to invest in assets that generate societal benefits alongside financial returns. This expansion of fiduciary duty meant that as long as the investments aligned with the overall investment objectives of the plan, including considerations of risk and return, they could include ESG factors without violating fiduciary responsibilities.

This was a pivotal moment for the sustainable investing community, as it acknowledged the legitimacy of integrating social and environmental factors into investment decisions, rather than exclusively focusing on financial performance. This perspective supported a broader understanding of investment success that encompasses not only profitability but also positive societal impact, thereby encouraging more asset owners and managers to embrace ESG considerations in their investment strategies.

The other options, while potentially relevant to specific facets of investment guidelines or practices, do not encapsulate the core broadening of fiduciary duty that occurred with the 2015 clarification. The emphasis was clearly on the allowance for generating societal benefits, making it a foundational step for the ESG movement in the investment community.