Integrating ESG Options into Retirement Plans
Many colleges and universities are working to align their education, research, and operations with the Sustainable Development Goals, particularly to address climate change. Increasingly, they are exploring and taking steps to integrate Environmental, Social and Governance (ESG) factors into their endowment investment decision-making.
However, a “blind spot” often exists between an organization’s sustainability efforts and the retirement investment options it provides for a vital constituency, its own employees. The overwhelming majority of institutions have not yet aligned their retirement plans with their sustainability commitments. This is a sizable gap in the sustainability leadership of colleges and universities.
The approximately 4,500 colleges and universities in the US alone represent a tremendous pool of retirement assets - totaling over $900 billion. Most do not have options in their retirement plans that align with their sustainability commitments or provide the opportunity for employees who want to invest in funds that align with their values.
IEN’s Sustainable Retirements Initiative aims to identify the barriers that must be addressed in order for institutions to provide retirement options that take material ESG factors into consideration. There is a convergence of favorable trends—regulatory, market forces and employee demand—that make this initiative a necessary and timely opportunity.
Background & Scope
This initiative is modeled after a similar project led by the World Business Council for Sustainable Development (WBCSD) for corporate retirement plans: Aligning Retirement Assets with Corporate Sustainability Commitments (ARA). The ARA brought together leading asset management firms and financial advisors with WBCSD member companies to identify the barriers and the ways in which to address them so that they can better align their retirement plans with their sustainability commitments.
The insights gained by this initiative are reflected in the development of two “toolkits” that provide practical and actionable information to better align company values with its sustainability commitments. Similar toolkits, unique to institutions of higher education, will be produced for this effort as well as a communications campaign to reach and educate faculty at IEN member campuses and other colleges and universities.
Participation is open to interested parties from all colleges and universities – including trustees and investment committee members, CFOs, HR professionals and other administrators, faculty and staff interested in the impact of their retirement funds.
There is no cost or obligation for representatives from higher education institutions to participate.
Leading asset management firms are providing expertise, guidance, and financial support of this initiative.
The Expert Council, made up of representatives from IEN, participating colleges and universities, and supporting asset managers provide strategic input and help steer the direction of the initiative.
Timeline and Outcomes
The first phase of IEN’s Sustainable Retirements initiative is designed as a one and half year project – with the design, formation and initial research and engagement taking place in the second half of 2019; and 2020 focused on developing toolkits, engaging participants, building awareness, and determining what subsequent phases of this initiative might include.
Outcomes will include a landscape study of the sector including barriers and opportunities for providing more ESG investing options to beneficiaries; a Toolkit for colleges and universities for making progress in this area; a network of interested parties involved in these process including beneficiaries, higher education institutions, plan administrators, asset managers, and advisors; and a set of recommendations for future research and/or activities to advance this work further.
Webinar Series - Integrating Sustainable Investment Options into Higher Ed Retirement Plans
- May 5th, 2020 - Overview
- June 30th, 2020 at 11:00 AM ET - Fiduciary Duty Considerations
- September, 2020 - Employee Education & Engagement
- November 2020 - Sustainable Retirements Toolkit
Sarah Bratton Hughes, Head of Sustainability, North America, Schroders
Dr. Erica Frank, Canada Research Chair at the University of British Columbia and founder, nextGenU
Ed Farrington, Executive Vice President, Natixis Investment Managers
Mike Fiorio, Trustee, Northland College
Jeff Gitterman, Co-founding Partner, Gitterman Wealth Management
Erik Gross, Associate Vice President, UNH Foundation
Tiffany Mcghee, CEO and Co-CIO of Institutional Investment Services at Momentum Advisors
Jeff Mindlin, Vice President, and Chief Investment Officer, ASU Enterprise Partners
Will Relle, Responsible Investment Consultant, Mercer
Chris Walker, Senior Advisor, Intentional Endowments Network
Georges Dyer, Executive Director, Intentional Endowments Network
For more resources related to sustainable investing options in higher education retirement plans visit the Retirement Resources page in IEN's resource library.
This initiative is made possible by supporting partners: