The Department of Labor gave its blessing Thursday for socially responsible investments in retirement plans for the first time.

"Investing in the best interests of a retirement plan and in the growth of a community can go hand in hand," said Labor Secretary Tom Perez.

DOL’s permission to plan fiduciaries covers everything from environmental, social and governance (ESG) investments to the ability to put money into community development funds and other types of economically targeted investments (ETI) without the worry of being penalized for ERISA violations.

“Fiduciaries do not need to treat commercially reasonable investments as inherently suspect or in need of special scrutiny merely because they take into consideration environmental, social, or other such factors,” a DOL directive said.

Morgan Stanley cheered the development.

“Prudent investors want to make investment decisions using as much materially relevant information available to them as possible,” said Audrey Choi, CEO of the Morgan Stanley Institute for Sustainable Investing.

US SIF: The Forum for Sustainable and Responsible Investment  Chief Executive Officer Lisa Woll praised the Labor Department for clearly signaling ERISA-governed plans, and by extension, those plans influenced by ERISA, may integrate critical ESG issues into their investment decisions.