IEN Q&A: Defined Contribution Plans with an ESG Overlay: The Hurdles & Untapped Investment Opportunities

Amrita Sareen, Senior Advisor at the Intentional Endowment Network in this post interviews five investment experts on the challenges of ESG focused retirements plans. Click here to access previous interviews 

 

While many institutional investors are taking steps forward to confront environmental, social, and governance (“ESG”) related risks in their portfolios, the defined contribution industry may be lagging behind. The lack of clear guidance from regulators, “the set it and forget it mentality” often associated with retirement plans, misconceptions surrounding ESG, a dearth of education and awareness, are among the obstacles retirement plan sponsors encounter when offering investment options with an ESG lens. 

Nevertheless, some market participants believe that the $8.2 trillion defined contribution industry will increasingly embrace ESG factors within investment products, particularly, as such considerations sharpen risk management tools and result in better investment decisions. 

The Intentional Endowment Network (IEN) is collaborating with market experts on creating a toolkit for sustainable retirement plans to help steer plan sponsors on how to navigate the challenges in offering ESG investment products. This guide is expected to be rolled out by the summer.  In this vein, IEN approached various experts within the defined contribution landscape to understand the challenges regarding ESG focused offerings to plan participants. Such experts included:

  • Erik Gross: Treasurer, University of New Hampshire Foundation
  • Mike Fiorio: Trustee, Northland College
  • Tiffany McGhee: CEO, CIO, Pivotal Advisors
  • Sarah Bratton Hughes: Head of Sustainability, North America, Schroders
  • Jim Roach: Senior Vice President, Retirement Strategies, Natixis Investment Managers

Find the complete interview here 

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