Higher Education Needs to Start Offering ESG Retirement Plans: Here's How

Advocates and Academics are Driving Universities to Offer Sustainable Retirement Plans;

However, Less Than 3% of Schools Offer Them, Plans Now Hold More Than $1 Trillion in 403(b) Assets

Colleges and universities in the U.S. are a hotbed of climate initiatives and the fossil-fuel divestment movement, but less than 3 percent of these schools offer sustainable retirement plans allowing their employees to avoid investing in funds that include major contributors to climate change and also address other environmental, social and governance (ESG) investment issues (e.g., gender equality and for-profit prisons), according to the Intentional Endowments Network (IEN).  The stakes here are high, with more than $1 trillion in 403(b) assets in higher education retirement funds.

IEN is calling on America’s institutions of higher education to start offering ESG integrated retirement plan options and is providing a new “Guide” to assist faculty in this endeavor. Representing over $1 trillion in 403(b) assets, retirement plan options for faculty and employees of colleges and universities are deeply invested in companies and investment products that run counter to the missions and goals of faculty, students, and institutions themselves.

According to the Plan Sponsor Council of America, “fewer than 3 percent of plan sponsor respondents included (an ESG) option on their plan investment menu.” As a result, responsible investment funds (ESG) make up less than 1 percent of the funds in a typical retirement program for colleges and universities.



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