The Labor Department recently warned that offering employees the option of investments in so-called ESG funds — funds that take environmental, social and governance issues into account when investing — may not be appropriate. The department "reiterated its long-standing view that, because every investment necessarily causes a plan to forgo other investment opportunities, plan fiduciaries are not permitted to sacrifice investment return or take on additional investment risk as a means of using plan investments to promote collateral social policy goals."

What a de ja vu moment. When I wrote about socially responsible investing (SRI) in the 1980s and 1990s — ESG is a subset of sustainable investing — most Wall Street money managers treated the idea of building a portfolio around values with disdain.

A favorite example among some money managers at the time involved smoking. Don't want to support tobacco companies, they would say to me? Well, tobacco stocks pay a high dividend. Invest in tobacco stocks and give the money to smoking-cessation charities.

That argument doesn't work anymore. Sustainable investing has gone from the fringes of finance into the money mainstream. Giant money-management firms like BlackRock and State Street have a major presence in the ESG market. Surveys of financial advisers and research analysts report growing interest in ESG investing among clients.

One reason is more people are looking at money differently, especially the younger generation. They want their money to reflect their values. For instance, a survey from last year of U.S. investors found 72 percent of millennials surveyed would increase their retirement savings contributions if they knew the investments were doing social good.

That said, the appeal of ESG investing — and sustainable investing in general — has broadened with studies and experience suggesting there is little financial difference between investing to make money and pooling money to make money and express values. Companies with admirable records on employee relations, environmental sustainability and corporate governance tend to do well over the long haul. Trying to do good with investing can be a sound strategy.

The Labor Department's cautious stance when it comes to retirement savings options is understandable. But it's a safe bet that 401(k) and similar retirement plans will offer their employees ESG options in the future. The employee demand is there.

Chris Farrell is senior economics contributor, "Marketplace," commentator, Minnesota Public Radio.