For the last few years a number of financial managers have been spending increasing resources to prod the companies they invest in to adopt more environmentally conscious and socially aware policies in their businesses. Many publicly-held corporations have had to deal with multiple shareholder resolutions annually intended to force them to adopt more socially or environmentally aware perspectives. Other investment fund managers have begun voting their proxies in favor of such shareholder resolutions, while taking other actions to encourage what they deem to be more socially salutary behavior.

However, there is an inherent conflict in such resolutions coming from investors: after all, the inevitable result of a corporation bowing to a proxy vote and prioritizing such activities is that it would reduce its profits–a bad thing for those who hold stock in the company.

Not so fast, say the activists driving this movement: while they may be pushing companies to pursue environmentally and socially responsible activities for their own political goals, they aver that such actions actually make good business sense as well, and that these will ultimately increase the profits of these companies. One oft-used rationale for resolutions pertinent to climate change is that these actions improve the long run sustainability of the company, which rational shareholders will value and thus will be reflected in the stock price.

While the firm-as-pure-profit-maximizer may be a perspective that fails to capture the complexity that is today’s multinational corporation, the notion that investor activists are somehow doing shareholders a favor and helping corporations correct a blind spot in their vision is absurd, and earlier this week the Department of Labor finally declared that to be the case.

The DOL declared that financial managers can no longer justify pushing environmentally or socially beneficial investments on the grounds that they are inherently beneficial for shareholders. Specifically, it wrote that:

“fiduciaries may not sacrifice returns or assume greater risks to promote collateral environmental, social, or corporate governance (ESG) policy goals when making investment decisions.”

The Labor Department’s actions effectively make it more difficult for activists to pursue social policy via proxy battles, which is precisely how it should be. Such efforts represent nothing less than an attempt to effectively tax the retirement wealth of savers to advance a political agenda.