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April 18 — More than 20,000 people signed a petition calling on companies such as General Electric, Microsoft and Johnson & Johnson to provide their employees with retirement savings options that are fossil fuel free.
The petition is being delivered soon to those companies and other publicly traded firms that together account for the 100 largest retirement plans in the U.S.
“Coal, oil and gas are increasingly risky investments, particularly for people on fixed incomes,” said Vanessa Green, who directs a divestment campaign focused on individual investors looking for sustainable alternatives.
“The demand for lower-risk, fossil-free options is there,” she said, but Divest-Invest and the other organizers of the petition say employees have few to no options to choose from at the moment.
Among the 100 plans of the companies, only one mutual fund that identifies as socially responsible and is free of holdings in the 200 most carbon-intensive fossil fuel companies was found by an online tool called Fossil Free Funds.
The tool was put together by the shareholder advocacy group As You Sow, using data from investment research provider Morningstar (178 ECR, 9/15/15).
“If [employees are] not offered anything, or even worse, if there’s no disclosure or no visibility into the sustainability of their 401(k) options or whether or not there’s any fossil fuel companies embedded inside, it leaves them unable to make that choice, if that’s something they’re interested in,” Andrew Montes of As You Sow told Bloomberg BNA.
Individual interest in sustainable and responsible investing is driving more retirement plan sponsors to offer such options. Of those that do, nearly a quarter said they were influenced by participant requests, according to a 2011 survey by the US SIF Foundation. And of those without sustainable or responsible investment offerings, 71 percent said they had never received recommendations or requests for it.
The idea has been especially popular among millennials, but Montes said it is not just a millennial issue. Rather, he says, it is part of “a growing awareness that our retirements are not disconnected from the issues in the world around us.”
“People can think of their retirement savings as a way to save the world that they want to retire into,” he said.
The U.S. Department of Labor opened the door to greater consideration of environmental, social and governance (ESG) issues in retirement assets when it issued new guidance in October saying pension fund fiduciaries can consider ESG factors when they have a direct relationship to their investment’s value.
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