Fossil Free Funds | Blog

Turning Retirement Savings into a Force for Workplace Equity

Mon, 24 Nov 2025 04:00:00 -0500

When you put money into a retirement plan, you’re doing more than saving for your future. You’re also investing in the companies that shape our economy and our society. Yet many retirement savers don’t realize that their investments may be supporting workplaces with weak or opaque equity practices.

Companies that fail to disclose workforce demographics, hiring practices, promotion pathways, and retention outcomes leave investors in the dark about how they responsibly and effectively manage a healthy workforce. This is where Social Justice Funds plays an essential role. Individuals can examine their mutual funds and ETFs through the lens of corporate equity performance and disclosure.

How retirement investments can unintentionally support inequitable companies

Most retirement plans are built around standard investment products: index funds, large-cap strategies, target-date portfolios. On the surface, these investment vehicles appear neutral. But because they often hold shares across wide swaths of the market, they may include companies that lag significantly on workplace equity.

The Workplace Equity Disclosure Scorecard and corporate engagement discussions highlight an important truth: while executives understand the value that a diverse workforce offers, many corporations still fail to disclose data that reflects how healthy their workplaces really are. Disclosures about hiring, pay bands, advancement by demographic groups, and retention are inconsistent, and in some cases, completely absent. Without this information, investors cannot assess whether companies are cultivating inclusive cultures that strengthen innovation and stability or whether they are silently perpetuating inequities.

When retirement funds include companies with weak or nonexistent workplace equity disclosures, savers may unknowingly support practices that undermine long-term performance, employee wellbeing, and corporate reputation. They are also, perhaps, losing out on the “diversity benefit” and the advantages that come from a workplace that welcomes and cultivates new ideas.

Why workplace equity transparency matters in the public DEI conversation

In recent years, workplace diversity, equity, and inclusion (DEI) have become central topics in the media. Headlines often frame DEI as controversial, politically charged, or in retreat. While this discourse can create the perception that companies are pulling back, the reality is more complex.

Behind the noise, many corporations continue advancing DEI initiatives and face increasing expectations from shareholders. Stewardship teams, employees, regulators, and consumers all demand transparency around human-capital practices. Even when public commentary becomes polarized, disclosure remains a foundational tool for building trust and demonstrating progress.

Investors should look past the headlines

Headlines alone cannot tell investors whether a company is managing workplace equity responsibly. What matters is the underlying data and whether companies publish meaningful disclosures, performance, and demonstrate year-over-year progress. When companies fail to disclose, investors lack the context needed to evaluate risk or to understand how the workforce is evolving.

As the Workplace Equity Scorecard emphasizes, transparency is essential for assessing whether equity programs are working. Savers who want their investments to reflect their values and their long-term financial interests should focus on disclosure over rhetoric.

Capturing the diversity advantage

Workplace equity is not only a social goal – it’s tied to innovation, employee engagement, and long-term performance. Companies that cultivate inclusive talent pipelines and track outcomes across their workforce often demonstrate stronger adaptability and problem-solving capacity. For investors, this means that aligning portfolios with inclusiveness can support both social impact and financial resilience.

Risks of ignoring workplace equity

Companies that fail to effectively manage workplace equity face several risks:

Legal and regulatory exposure, as discrimination, bias and harassment in the workplace remain illegal.
Reputational risk, especially as public expectations for inclusive workplaces rise.
Recruitment and retention challenges, since top talent gravitates toward organizations that demonstrate fairness and opportunity.

Social Justice Funds empowers retirement savers to take action:

Evaluate your existing funds. With Social Justice Funds, you can check whether your investments include companies that disclose workplace equity data, or whether they hold companies that remain opaque.
Explore alternative investment options. Social Justice Funds helps investors identify funds with greater exposure to companies that offer transparency around inclusion.
Talk to your financial advisor or plan administrator. Let them know you want to integrate workplace equity scores into your investment decisions.
Align your portfolio with your values. Workplace equity matters – for employees, for corporate performance, and for the future economy. Aligning your retirement savings with companies committed to justice and transparency amplifies your impact.

Why aligning portfolios with inclusive workplaces matters now

The workforce of the future is changing, and companies that invest in a high-functioning workforce and transparency will be best positioned to thrive. Retirement savers now have the tools to support these companies and avoid those that aren’t sharing vital information. Social Justice Funds empowers savers to make their own decisions on how to build a financial future rooted in fairness, accountability, and long-term strength.

Jaylen Spann

Senior Associate, Whistle Stop Capital

Advancing Racial Justice with Social Justice Funds

Mon, 10 Nov 2025 04:00:00 -0500

Retirement savings and racial justice: the hidden connection

Mutual funds found in retirement plans can end up holding companies with poor track records on racial equity — whether that’s weak workplace diversity policies, lack of accountability around discrimination, or business models that perpetuate systemic bias, reinforce structural racism, widen the gender pay gap, and inflict harm on historically marginalized communities.

For investors who care about justice, this hidden connection matters. That’s where Social Justice Funds comes in: helping investors see not just the financial performance of funds, but also the racial justice implications behind them.

Why racial justice transparency and disclosure matters

To hold companies accountable, you need quality data. As You Sow’s Racial Justice Initiative and its Racial Justice Scorecard Data Visualization Tool make it possible to evaluate corporate actions – both internally and externally – and disclosures in measurable ways. Our Racial Justice Scorecard has five core pillars with 28 KPIs. Key indicators on racial equity; diversity, equity, and inclusion (DEI) disclosure and policies; and environmental justice, give investors a clear view of where companies stand. Transparency isn’t just good for justice; it’s essential for investors who want long-term, sustainable value by ensuring the long-term health of companies.

A recent report by As You Sow concluded that companies with workforce diversity are linked to financial outperformance. Likewise, Parnassus Investment furthers the business case for environmental justice, highlighting that companies should proactively address their pollution footprint rather than risk financial, legal and brand damage. By integrating racial and environmental justice data into investment decisions, investors can move beyond statements of intent toward measurable impact. In doing so, they not only drive accountability but also help shape a more equitable and resilient economy.

What companies are saying in 2025

Companies exist within the social framework of their communities and have a responsibility to preserve and protect those communities from harm, including environmental damage caused by corporate actions. As shareholder advocates, As You Sow educates and motivates companies to examine implicit biases built within their systems by engaging directly with corporate leaders. The Racial Justice Scorecards serve as the backbone of our corporate engagement strategy and our key performance indicators (KPIs) are evaluation guidelines which track and monitor corporate progress.

As You Sow and Whistle Stop Capital have been tracking corporate approaches to DEI and racial equity since 2020, looking at publicly available data and speaking to hundreds of companies about their programs. Despite a strategic shift by some – driven by current political pressures and legal uncertainties – many corporate leadership teams are continuing to invest in diverse talent pipelines and inclusive workplace systems because they recognize the value it brings to their ability to grow, innovate, and attract the best talent. For example, our research shows that in Q3 of 2025, 32% of the Large-Cap 3000 companies have BIPOC resource groups, and 27% have pipeline programs to recruit BIPOC employees and/ or support or partner with HBCUs and/or other colleges for BIPOC individuals. In fact, recent analyses reaffirm that companies with diverse leadership teams continue to outperform peers in profitability and innovation.

Executives themselves cite diversity as a critical driver of problem-solving and adaptability, especially in rapidly changing markets. Even as public discourse around DEI has become more polarized, many forward-looking leaders understand that inclusive workplaces are not a political stance, but a proven business strategy tied to long-term performance and competitiveness.

Turning values into investment choices

For investors who want their portfolios to reflect their values, Social Justice Funds provides the tools to act. The platform helps identify funds that score well on racial justice, so investors don’t have to choose between strong returns and strong principles. By aligning portfolios with funds that support racial justice, As You Sow’s Social Justice Funds helps individuals and workplaces shift their financial systems away from harm and toward equity, sustainability, and long-term financial growth.

Retirement savings can be more than a personal safety net — they can be a lever for justice. By choosing funds that support racial justice, investors help keep racial justice on the corporate agenda. Now is the time to ensure those dollars are working toward a future where equity is more than an aspiration!

Anne Schmidt

Racial and Environmental Justice Sr. Associate, As You Sow

The Diversity Dividend in Your 401(k) Funds

Thu, 30 Oct 2025 06:00:00 -0400

In 2023, As You Sow released Capturing the Diversity Benefit: Workforce Diversity Linked to Financial Performance, which found a statistically significant correlation between higher percentages of BIPOC (Black, Indigenous, and People of Color) management and increases in eight standard financial metrics.

As we worked on Social Justice Funds, our newest Invest Your Values tool, we wondered if we would find a similar effect. How do the returns of mutual funds correlate with their gender equality, diversity disclosures, racial justice, and LGBTQ+ equity ratings?

Correlating fund returns with diversity, equity, and inclusion

Our results showed a statistically significant but weak positive relationship between how a fund was scored on Social Justice Funds and financial performance. The relationship is not strong enough to say Social Justice Funds scores predict returns, but it doesn’t appear to penalize performance either.

Social Justice Funds scores correlated with month-end trailing returns, as of Oct 2025

Period	# of Funds	r	R2	p-value	ρ	Strength	Direction
1-Year	3,183	+0.0855	0.00732	1.35E-06	+0.217	Very weak	Positive
3-Year	2,899	+0.224	0.0501	3.21E-34	+0.308	Weak–Moderate	Positive
5-Year	2,645	-0.0958	0.00917	8.02E-07	+0.0572	Very weak	Mixed
10-Year	2,106	+0.228	0.0519	3.41E-26	+0.298	Weak–Moderate	Positive

Calculating correlation provides a straightforward statistical measure of how closely two variables move together: whether higher Social Justice Funds scores tend to coincide with higher or lower returns. By examining multiple time horizons, we can see whether any relationships are persistent over the long run.

The results were stronger when just the U.S. Large Cap Equity, U.S. Small/Mid Cap Equity, and Allocation fund groups were considered. For these U.S.-focused funds, higher Social Justice Funds scores were modestly but reliably associated with stronger financial performance, especially over longer time horizons.

U.S. Large Cap Equity, U.S. Small/Mid Cap Equity, and Allocation funds: Social Justice Funds scores correlated with month-end trailing returns, as of Oct 2025

Period	# of Funds	r	R2	p-value	ρ	Strength	Direction
1-Year	2,415	+0.174	0.0303	7.10E-18	0.324	Weak	Positive
3-Year	2,195	+0.309	0.0957	6.47E-50	0.381	Weak–Moderate	Positive
5-Year	2,012	+0.139	0.0193	3.99E-10	0.175	Weak	Positive
10-Year	1,597	+0.279	0.0777	6.87E-30	0.359	Weak–Moderate	Positive

The scatterplot below shows the relationship between Social Justice Funds scores and 10-year trailing returns for U.S.-focused funds.

Looking at these U.S.-focused funds, the Racial Justice and Diversity Disclosures scores had the strongest correlation with long-term 10-year performance.

U.S. Large Cap Equity, U.S. Small/Mid Cap Equity, and Allocation funds: Gender equality, diversity disclosures, racial justice, and LGBTQ+ scores from Social Justice Funds correlated with month-end trailing returns, as of Oct 2025

Score	Period	# of Funds	r	R2	p-value	ρ	Strength	Direction
Gender Equality	10-Year	1,597	+0.0812	0.0066	1.16E-03	0.0703	Very weak	Positive
Diversity Disclosures	10-Year	1,597	+0.326	0.106	7.43E-41	0.411	Weak–Moderate	Positive
Racial Justice	10-Year	1,597	+0.331	0.109	4.71E-42	0.413	Weak–Moderate	Positive
LGBTQ+ Equity	10-Year	1,597	+0.243	0.0588	8.26E-23	0.267	Weak–Moderate	Positive

What it means

These results are in alignment with previous As You Sow research in The Diversity Benefit report. In short: Beware those who say DEI is a “non-financial” factor that should be ignored in investing, or that integrating DEI as an investment factor means sacrificing returns. The evidence doesn’t agree – it shows that individuals and workplaces can shift their financial systems away from harm and toward justice, equity, and long-term impact while generating strong returns.

Methodology

Social Justice Funds scores mutual fund portfolios on four key metrics: gender equality, diversity disclosures, racial justice, and LGBTQ+ equity. Each of these fund scores are calculated by applying a different company scorecard to the portfolio holdings and aggregating a market value-weighted portfolio score. For the purposes of this analysis, these four scores were combined into a single Social Justice Funds score by summing.

Relationships between Social Justice Funds scores and financial performance were assessed using ordinary least squares (OLS) linear regression. OLS regression is a statistical analysis used to assess the relationship between two variables. OLS regression can provide information on both the direction (positive or negative) and strength of the relationship. The results of this method can be assessed for statistical significance using p-values. The p-value is used to verify hypotheses, where a smaller p-value indicates a lower likelihood of a value occurring by chance. Traditionally, p < 0.05 indicates a value is unlikely to occur by chance and is therefore statistically significant, which is what the following analyses use.

Some limitations should be noted. Since the fund scores reflect current holdings and current company scores, they may not accurately represent a fund’s composition over the past 1–10 years, or how companies performed on justice-focused KPIs over time. Coverage limitations in the four company scorecards, particularly for small-cap or non-U.S. holdings, may introduce bias in the fund universe.

All funds included in this analysis are U.S. domiciled open-end mutual funds or ETFs, with a handful of collective trusts and variable annuities. Only funds with at least 50% of the portfolio invested in stocks were included. Funds were grouped into 5 categories: U.S. Large Cap Equity, U.S. Small/Mid Cap Equity, International Equity, Sector Equity, and Allocation. Only funds that are rated on all four equity and justice issues, meaning at least 33% of the portfolio had coverage on all four company scorecards, were included. The fund holdings data is as of October 2025. The fund performance data is as of the last day of September 2025.

Andrew Montes

Director of Digital Strategies, As You Sow

Introducing Social Justice Funds

Thu, 30 Oct 2025 05:00:00 -0400

You believe in justice. You show up, speak out, and push for change in your community and workplace. But what if your retirement savings are silently working against everything you stand for?

Most workplace retirement plans invest in funds that represent business-as-usual: fossil fuels, private prisons, and corporations that perpetuate systemic bias, reinforce structural racism, widen the gender pay gap, and inflict harm on historically marginalized communities. This is a story we’re hearing more and more, and it’s exactly why we’ve created Social Justice Funds.

Through our Invest Your Values platform, we’re helping individuals and workplaces shift their personal finances away from harm and toward justice, equity, and long-term impact. The new tool allows investors to easily see in one place if your 401(k) options or personal portfolio is invested in:

Companies that promote diversity in their marketing but fail to back it up with real action – such as reporting on workplace diversity initiatives, policies, or disclosure practices.
Companies that made public statements in support of racial justice but fail to follow through with meaningful action.
Companies that lack comprehensive policies, equitable benefits, or transparent reporting to ensure LGBTQ+ employees feel safe, respected, and supported.

These new ratings join our existing Invest Your Values ratings on gender equality, prisons & borders, and military weapons, giving people a wide view into the social justice impact of their savings.

An example of a Social Justice Funds report card.

Aligning profits with purpose

These tools are about offering investors insight into the social justice impact of their portfolios, alongside traditional metrics like financial returns. The search page helps you find mutual funds and ETFs that match your values and have financial returns that beat the market. A growing body of evidence shows a strong connection between diverse management and corporate financial success, making it clear that focusing on social justice matters to both businesses and investors. The new fund results align with previous research, showing a statistically significant positive correlation between social justice grades and long-term financial performance.

Investors can use Social Justice Funds to search for funds that earn the highest annualized returns, and the highest grades for the issues that matter to them. Each fund can be compared to benchmark indexes like the S&P 500 on financial performance and sustainability results.

In the face of recent political pressure, many U.S. companies have scaled back or eliminated their DEI programs. While these actions may have appeased political opposition to DEI, companies have alienated their consumers sparking swift boycotts, costing some of them billions in revenue and share value.

These boycotts have made it clear that collective individual action has the power to hold companies accountable. But consumer choices are only one piece of the puzzle. For many of us, our biggest financial influence isn’t at the cash register — it’s in our retirement plans. By aligning 401(k)s and other retirement plans with social justice values, investors can send an even stronger message: companies must remain committed to social justice or will face financial and reputational consequences.

Taking action

As You Sow’s Invest Your Values suite of tools are free to use: We built them to encourage investors to move their hard-earned savings to funds that are aligned with their values. Not sure where to get started? Check out our action toolkit explaining how individuals can talk with their financial advisor or retirement plan manager to add sustainable investment options.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

ICE is in your 401(k)

Fri, 17 Oct 2025 05:00:00 -0400

Over the past decade, there have been several efforts to phase out U.S. federal and state use of private criminal detention facilities. But today, the federal government is using emergency powers to sign no-bid contracts with private prison operators. Immigration and Customs Enforcement (ICE) is rapidly expanding operations and now detains nearly 60,000 people in immigration detention centers. Previously closed detention centers are reopening, including prisons where children are separated from their family members.

Nearly 90% of people in ICE custody are held in facilities run by private companies like CoreCivic and GEO Group. Private prison companies make more money the more people they detain, creating a built-in incentive to keep facilities full. But maximizing profits often means minimizing expenses. That can translate into fewer medical staff, inadequate food and sanitation, and weaker oversight. Watchdogs have repeatedly linked these poor conditions to harm and even deaths inside detention centers.

Here’s what people don’t realize: If you have a 401(k) from your employer, it’s likely investing your savings in these private prison operators.

Private prisons in your portfolio

As publicly-traded companies, CoreCivic and GEO Group issue stocks and bonds that investors and fund managers purchase for their portfolios. Stocks represent ownership stakes in these companies; bonds represent loans that allow the companies to expand operations. If your 401(k) funds invest in CoreCivic or GEO Group stock, you’re effectively a part owner of a whole network of immigration detention centers. If your 401(k) owns their bonds, you’re effectively lending them money to build more detention centers.

When ICE raids are filling detention centers – where over 70% of people held have no prior criminal convictions – it could be your 401(k) that helped finance that facility.

These investment decisions are being made by major fund managers like Vanguard, BlackRock, State Street, and Fidelity. Much of this is happening passively, through index funds that deliberately refuse to consider social impacts, ethical concerns, or corporate responsibility risks when selecting investments. For example, the Vanguard Target Retirement series – built from index funds and one of the most popular “default options” in 401(k) retirement plans – holds shares of CoreCivic and GEO Group stock worth tens of millions of dollars. Most of that money came from the paycheck contributions of U.S. workers saving for retirement.

While the private prison industry is currently experiencing a boom, history shows private prison companies are highly vulnerable to political shifts, lawsuits, and reputational damage. The industry’s short-term growth often comes with long-term volatility, ultimately making it a risky long-term bet for retirement investors.

How you can invest in a future without private prisons

It doesn’t take much work to make sure your savings are prison free. The key thing is that if they’re your savings, it should ultimately be your decision where it’s invested – and where it’s not.

If your employer-offered 401(k) plan already offers a socially responsible fund, use our Prison Free Funds database to find out if it’s fully prison-free. Some funds avoid fossil fuels but not prisons, for example. It’s important to have transparency on what’s actually in the fund.

If your 401(k) doesn’t yet have a prison-free option, don’t give up. You can use our action toolkit to learn how to work with your colleagues to ask your plan administrators to offer investment options that avoid profiting from immigration detention centers. We have power when we come together to form a united front in the fight for justice and equality for all.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

Employees are already keeping billions out of fossil fuels via their 401(k)s

Wed, 17 Sep 2025 05:00:00 -0400

Most American workers know that a 401(k) can be an important building block of their retirement security. What fewer realize is that their hard-earned savings are often invested in fossil fuel companies and other high-emission businesses that are contributing to the climate crisis and face significant climate-related financial risks.

Here’s the encouraging news: employees are already taking action to protect their savings by choosing sustainable investment options in their 401(k) plans. Our new analysis estimates that by choosing a green 401(k) fund, U.S. employees are keeping a lot of money from being invested in fossil fuel companies.

Moving billions out of the high-carbon economy

We analyzed over 70 defined contribution (DC) plans offered by major companies such as Google, Amazon, and Target, as well as universities like Harvard and Columbia. The plans amount to more than $1.2 trillion in employee savings. By looking at the actual fund options that employees selected within those plans, and comparing them to analogous index funds, we calculated how much less exposure to fossil fuels employees have when they choose the sustainable option.

What we found: across these plans, employees who chose the sustainable option have collectively shifted about $200 million away from fossil fuel companies. In other words, if those same employees had instead invested in standard market index funds (such as the S&P 500), their retirement savings would include $200 million more in fossil fuel stocks than they do today.

Because our dataset represents roughly 10% of the entire DC market (totaling about $12 trillion nationally), we can reasonably extrapolate this trend. That suggests employees across the U.S. have already shifted about $2 billion away from fossil fuels simply by selecting sustainable options in their retirement plans.

Employer	Total saved from fossil fuel investments via sustainable funds
Adobe	$4,714,991
Airbnb	$56,949
Amazon.com	$47,441,204
Atlassian	$255,901
Bloomberg	$3,720,912
Booking Holdings	$2,537,246
Columbia University	$5,785,935
Deloitte	$18,831,223
Disney	$2,024,325
Dollar General	$3,215,249
Duke University	$4,629,321
Etsy	$232,086
Google	$80,136,754
Harvard University	$8,873,998
Intuit	$2,465,877
Monster Energy Company	$885,564
Northwestern University	$3,249,529
Palo Alto Networks	$142,866
Pinterest	$236,142
Princeton University	$2,963,128
Prologis	$68,977
Stryker	$1,291,082
Sutter Health	$5,701,052
Take-Two Interactive Software	$92,162
Tesla	$1,085,303
The New York Times	$1,095,725
University of Notre Dame	$756,008
Whole Foods	$1,475,800
X Corp	$174,807
Total	$204,140,114

Investing in fossil fuels is risky business

These employees are part of a broader global movement of investors, asset managers, and pension funds shifting capital from high-carbon business models and toward clean energy solutions. Despite partisan pushback on sustainable investing, a recent report finds that 75% of 401(k) investors want sustainable investment options. As demand for sustainable investing increases, employers are trying to meet their employees’ investment preferences by expanding their retirement plan offerings. Google replaced an existing fund that was underperforming, and they found that a fossil-free fund was a better replacement from a financial standpoint. If they instead went with a comparable index fund, those Googlers would have tens of millions more invested in oil majors, coal miners, and gas plants.

One big reason that matters: investing for retirement is first and foremost about financial returns. Fossil fuel investments face transition risk, regulatory risk, and physical risk from rising temperatures. We previously found that because of consistent financial underperformance (the fossil fuel sector has underperformed the S&P 500 in seven of the last 10 years) employees at 12 tech-sector companies could have earned an estimated $5 billion in additional returns. The financial performance of each company’s retirement plan holdings was estimated to have been higher on an absolute and risk adjusted basis if they had divested from the Energy Sector ten years earlier.

How you can invest in a sustainable future

If your 401(k) plan already offers a sustainable fund, use our Fossil Free Funds database to find out if it’s fully fossil-free. If it is, take the amount you have in that fund and multiply by 9% - that’s roughly how much you’ve kept out of fossil fuel investments compared to a basic index fund.

If your 401(k) doesn’t yet have a fossil-free sustainable option, don’t give up. You can use our action toolkit to learn how to work with your colleagues to ask your plan administrators to satisfy their fiduciary duty by offering investment options that mitigate climate-related financial risk. Together, employees have the power to shift billions away from fossil fuels and towards a more sustainable future.

The story here is simple but powerful. Employee choices matter. Retirement savings are not just passive; they shape the economy of the future. You can make meaningful financial decisions that align your retirement security with the realities of a warming planet and a changing economy.

How we did the analysis

Our retirement plan sustainability scorecard rates some of the largest U.S. retirement plans based on their investment exposure to environmental and social issues. We use Form 5500 filings, which companies are required to file with the government, to find details on plan assets.

The table linked here shows how we calculated the difference between the percentage invested in fossil fuels of each plan’s sustainable fund options against comparable index funds.

Andrew Montes

Director of Digital Strategies, As You Sow

What to do if your insurance company is supporting fossil fuels

Wed, 23 Jul 2025 05:00:00 -0400

Climate change-fueled wildfires, floods, and severe storms are becoming more frequent and expensive. Already, climate-related damages are costing the global economy an estimated $16 million per hour. Who’s paying these costs? In many cases, it’s insurance companies that are footing the bill.

Extreme weather events are putting serious strain on insurance companies. Over the past two decades, climate change has caused $600 billion in insured losses. The result: rate increases for consumers, and a decrease in availability of insurance protection.

But primary insurers and reinsurers continue to underwrite and invest in fossil fuels, even as they face dramatic losses associated with catastrophic weather-related events, driven by the high-carbon industries they support.

Drop the policy, not the planet

If you’re concerned that your insurance company may be using your premium payments to fund climate chaos, there are some simple steps you can take to learn more and find sustainable insurance alternatives.

Step 1 – Find out if your insurer is supporting fossil fuels

Unfortunately, the biggest US insurance carriers have billions invested in fossil fuel stocks and bonds. These firms understand that climate change poses financial risks; they take climate risk from wildfires into account when setting homeowner insurance rates, and sometimes refuse to provide any coverage at all. But they’re seemingly not addressing the risk their own investments are helping create. The data below is from the Investing in Climate Chaos database by Urgewald, and was collected by Green America in May 2024.

Insurance Company	Total Fossil Fuel Investments (US$)
Berkshire Hathaway (parent of GEICO)	$95.8 billion
State Farm	$20.6 billion
USAA (through Victory Capital)	$11.2 billion
AIG	$9.7 billion
Nationwide	$7.2 billion
Allstate	$4.5 billion
Travelers	$1.9 billion
Liberty Mutual	$1.8 billion
The Hartford	$1.3 billion

Another resource is the Insure Our Future Scorecard, which looks at 30 of the largest primary insurers and reinsurers and rates their fossil fuel underwriting and investments. The scorecard also highlights the imbalance between premiums from renewables versus fossil fuels, revealing which companies are accelerating the energy transition, and which are falling behind.

Step 2 – Search for green insurance solutions

If you’ve found out that your insurance company is financing industries that are fueling the climate crisis, it may be time to consider a more sustainable insurance solution.

One helpful resource is Green America’s Climate Smart Insurance Directory, which lists insurance companies in each state that avoid insuring fossil fuel projects, and avoid direct investment in the fossil fuel industry. The directory has options for both home and auto insurance.

Beyond your personal finances, you can also encourage your workplace to engage their commercial insurance providers and ask for climate-smart policies. Organizations like Premiums for the Planet can help connect businesses with insurers who understand that the future of insurance requires climate action.

Step 3 – Check your investments for insurance companies supporting fossil fuels

Fossil Free Funds introduced our Fossil Fuel Finance ratings for mutual funds and 401(k)s in 2022, helping you discover if you’re invested in insurance companies supporting coal, oil, and gas. Now, we’ve updated those ratings to use the most recent data on insurance company underwriting of fossil fuels.

If you’re saving for retirement, your investments are likely invested in the same insurance companies that are fueling the climate crisis. As You Sow’s Fossil Fuel Finance ratings are based on data from the Insure Our Future Scorecard. We assign scores to mutual funds based on a portfolio’s investments in insurance companies providing financial commitments to fossil fuels – including tar sands, arctic drilling, and coal mining. These ratings help investors search for funds that avoid climate risk from financial institutions.

Spread the word

Let others in your circle know about green insurance options. They may have the same concerns about climate change and environmental impact as you. Encouraging these conversations can extend the impact beyond your individual choices and help speed the growth of the sustainable insurance industry.

It’s time for insurance companies to accelerate the transition to a just and sustainable economy. By continuing to underwrite fossil fuel expansion and invest in fossil fuel companies, the insurance industry is deepening its own crisis and exposing both policyholders and investors to serious financial risk. Finding a sustainable insurance company and investing in funds that avoid insurance companies with poor climate safeguards could help protect your savings and help build a safe and sustainable future for all.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

Investing in a Peaceful Future – VIDEO

Mon, 14 Jul 2025 05:00:00 -0400

This article was originally posted at Ploughshares.org.

This video explores how your retirement savings might be financing arms manufacturers making nuclear missiles, cluster bombs, and other controversial military weapons used in wars and armed conflicts all over the world. In less than 4 minutes, Grant Bradski walks you through As You Sow’s Weapon Free Funds tool, which is a resource for ethical investors seeking to align their portfolios with peace and sustainability.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

Google’s fossil free fund option, by the numbers

Tue, 24 Jun 2025 05:00:00 -0400

When the Google 401(k) added a fossil-free fund, it didn’t just give employees a climate-conscious sustainable investment option with comparable returns. It gave employees a way to directly reduce their fossil fuel investments, as well as their financed emissions.

Just how much have Googlers moved out of fossil fuel investments by choosing this sustainable option? We decided to do the math and find out.

Goodbye, fossil fuel investments

The Google 401(k) administrators added the sustainability-focused Parnassus Core Equity fund for a straightforward reason: financial returns. They wanted to replace an existing fund that was underperforming, and they found that a fossil-free fund was a better replacement from a financial standpoint. They were doing their due diligence to maintain their fiduciary duty.

Since it was added, Googlers have allocated over $710 million to that Parnassus fund, which has 0% in fossil fuels. If that $710 million had instead gone into a basic index fund with 9% fossil fuels, it would have resulted in an additional $63 million in fossil fuel investments. That’s $63 million not invested in oil majors, coal miners, and gas plants, because of a simple change to one company’s retirement plan.

Financed emissions cut by 70%

The switch also reduced employees’ “financed emissions”, a practical tool for accountability of ownership of GHG emissions from a company. Compared to an S&P 500 index fund, the Parnassus fund has over 70% lower financed emissions (Scope 1+2+3).

Reducing financed emissions is not the same as reducing real-world emissions. But capital allocation signals market demand, and systemic change happens through aggregation. Also, holding high-emitting companies exposes portfolios to policy risk, legal risk, stranded asset risk, and reputation risk. By choosing the sustainable option and moving money out of fossil fuel investments, these Googlers helped make their nest egg a little bit safer.

Table 1: Investment amount: $710 million

	Financed emissions, tonnes of CO2e (Scope 1+2+3)	Reduced financed emissions (Scope 1+2+3) from index	Reduced financed emissions (Scope 1+2+3) from index as %
[VFIAX] Vanguard 500 Index Fund	158,700	-	-
[PRILX] Parnassus Core Equity Fund	44,900	-113,800	-72%

Fossil fuel financial losses

Of course, the numbers most people think about with 401(k) investments are financial returns. We previously found that because of the fossil fuel sector’s consistent financial underperformance – it has underperformed the S&P 500 in seven of the last 10 years – Google employees could have earned an estimated $1.15 billion in additional returns. The financial performance of Google’s retirement plan holdings was estimated to have been 9.15% higher if they had divested from the Energy Sector ten years ago on an absolute and risk adjusted basis.

But providing one fossil free fund won’t solve the climate problem. There’s still more for Google to do. Two-thirds of Google plan assets are in the company’s default option, the Vanguard Target Retirement Fund series, which deliberately ignores climate change as an investment factor. In 2024, over 1,200 Google employees requested that a fossil fuel-free target date index fund be added to the lineup. To date, the company hasn’t responded.

Looking at other sustainable funds

Google’s not the only company that has helped their employees shift savings out of fossil fuels and lower their financed emissions. Every company with a fossil-free sustainable fund option means less money invested in fossil fuel companies compared to a basic index fund, and less financed emissions by their employees.

It makes sense – if you invest less in high-carbon companies, you own less of their emissions. It also means that your portfolio has less exposure to the fossil fuel industry and its decades-long declining performance. The table below shows the reduction in financed emissions for five sustainable portfolios compared to the S&P 500 benchmark.

Table 2: Investment amount: $1 million

	Financed emissions, tonnes of CO2e (Scope 1+2+3)	Reduced financed emissions (Scope 1+2+3) from index	Reduced financed emissions (Scope 1+2+3) from index as %
[VFIAX] Vanguard 500 Index Fund	223.4	-	-
[SPYX] SPDR® S&P 500 Fossil Fuel Reserves Free ETF	185.7	-37.7	-16.9%
[SPFFX] Sphere 500 Climate Fund	132.6	-90.9	-40.7%
[ESGU] iShares ESG Aware MSCI USA ETF	253.1	+29.6	+13.3%
[FITLX] Fidelity U.S. Sustainability Index Fund	207.8	-15.6	-7.0%
[PRILX] Parnassus Core Equity Fund	63.2	-160.2	-71.7%

How you can cut your own financed emissions

If your 401(k) plan has a sustainable fund, use our Fossil Free Funds database to see if it’s fully fossil-free. If it is, take the amount you have in that fund and multiply by 9%. That’s roughly how much you’ve kept out of fossil fuel investments compared to a basic index fund.

If your 401(k) doesn’t have a fossil-free sustainable option, don’t give up. If you work together with your colleagues and ask the plan administrators to satisfy their fiduciary duty by offering investment options that mitigate climate-related financial risk, you could be cutting your financed emissions soon enough. Our action toolkit helps walk you through it step-by-step.

Financed emissions methodology

At the fund holding level, financed emissions are calculated as:

Financed Emissions = (Portfolio Investment ÷ Enterprise Value Including Cash) × Company Emissions

This approach to calculating financed emissions follows the guidance of the Partnership for Carbon Accounting Financials (PCAF), which is designed to estimate an investor’s share of a company’s emissions based on the size of their investment.

To get portfolio-level emissions, we summed the financed emissions across all companies in the fund. That means we looked at the total emissions for each company in the portfolio, determined the investor’s fraction of ownership, and added it all up.

For table 1, we used an investment amount of $710 million, the amount that Google employees have invested in the Parnassus fund, as of the most recent Form 5500 filing data available. For table 2, we assumed a $1 million investment in each fund. E.g. if a fund had $10 billion in total assets, we calculated that a $1 million investment represented 0.01% ownership of the fund’s emissions. We then applied that ownership share to the fund’s total reported Scope 1+2+3 emissions. Finally, we compared each fund’s financed emissions to the baseline of the S&P 500 index.

We used Bloomberg emissions data, using company-reported emissions when available, and Bloomberg’s estimated values where reported data was unavailable. All emissions data are annualized, though the time periods covered can vary slightly between companies. A handful of companies were missing data, but all portfolios analyzed had emissions data for >95% of holdings.

We included Scope 1–3 emissions in our assessment. While Scope 3 emissions reporting is imperfect at this time, these emissions are crucial to understand relative financed emissions.

One sustainable fund (ESGU) showed higher emissions compared to the S&P 500 benchmark when Scope 3 emissions were included. While this may be the result of imperfect data, it is also worth noting this is a portfolio that still maintains a 6.6 percentage investment in fossil fuels, which is much closer to the general industry benchmark of 9% than a typical sustainable investment fund. These results suggest the importance of confirming that sustainable funds are truly reducing exposure to higher climate-risk sectors in order to prevent “greenwashing”.

Andrew Montes

Director of Digital Strategies, As You Sow

Bankrolling Bombs

Thu, 22 May 2025 05:00:00 -0400

This article was originally posted at Ploughshares.org.

Over the last few months, I’ve written about how weapon makers are connected to humanitarian risks, and how that translates to financial risks for 401(k) investors. In this post we’ll trace the investment chain from A to Z, showing how our savings end up flowing towards military weapon manufacturers, and how you can find sustainable funds that avoid weapon investments.

Military weapon manufacturers

The financial value chain starts with companies that make weapons and sell them to militaries around the globe. Among the largest defense contractors are many that are investor-owned, such as Lockheed Martin, RTX (formerly Raytheon), Northrop Grumman, General Dynamics, and Boeing. Each of these five major arms makers is also involved in nuclear weapon production.

As publicly traded companies, they issue stocks and bonds that investors purchase for their portfolios. Stocks represent ownership stakes in the company and come with voting rights; bonds represent loans to the company with guaranteed interest rates. If your 401(k) owns weapon maker stocks, you’re a part owner of a bomb factory. If your 401(k) owns weapon maker bonds, you’re lending out your money so the company can open more bomb factories.

When those bombs are used in attacks that kill civilians, contribute to humanitarian crises, and potentially violate international human rights law, that means your 401(k) helped pay for it, and your 401(k) profited from it. (Though not as much as you might think—weapon investments face unique financial risks).

Fund managers

Between the company’s stock and your 401(k), you’ll find fund managers like Vanguard, BlackRock, Fidelity, and State Street. These money managers bundle stocks and bonds into portfolios that are sold as mutual funds and other investment products. Here is some useful terminology:

Mutual fund: A financial vehicle representing a portfolio of stocks and bonds. Mutual funds are the building blocks of employer-offered 401(k) plans, and they frequently hold weapon company stocks.
Exchange-traded fund: Like a mutual fund, but it can be traded like an individual stock. Exchange-traded funds (ETFs) are less common in 401(k)s but are popular in IRAs and personal portfolios. Many ETFs are index funds.
Index fund: Funds that track the components of a financial market index. Funds tracking popular indexes like the S&P 500 (the 500 largest U.S. companies) are often found in 401(k) plans. The S&P 500 includes more than 20 major military contractors.
Target date fund: Balanced portfolios designed to shift risk over time to make it simpler for retirement savers to invest with the appropriate risk for their targeted retirement age (the “target date”). Many 401(k)s use target date funds as the default option.
Sustainable fund: Funds that deliberately adopt a sustainable, responsible, or ethical investment strategy to avoid environmental and social risk factors. Sustainable funds come in different flavors, but many have weapon exclusion policies.

The fact is that many index funds and target date funds have military weapon investments. If a fund doesn’t advertise itself as a sustainable/ethical investment, there’s a good chance you’ll find companies like Lockheed Martin and RTX inside.

401(k) plans

Did you know if your employer offers a 401(k) or similar retirement plan, it has a legal responsibility, called “fiduciary duty,” to manage that plan in your best interest? Companies essentially hand off that duty to fund managers like Vanguard and BlackRock by choosing their funds for the 401(k). But when they do so, they’re not telling workers the full extent of their exposure to controversial investments like military weapons. The fund holdings are buried layers deep in legal documents, if they’re available at all.

Example: Amazon 401(k) plan

The Amazon 401(k) is one of the largest in the U.S., with over 1.2 million plan participants and $25 billion in assets. Over 60% of that is invested in Vanguard target date funds, which are built from index funds. Most of the rest is in other index funds from Vanguard and State Street.
Because the Vanguard Target Retirement funds are based on total market index funds, they’re virtually guaranteed to invest in every publicly traded weapon maker on the market.
Across the entire Amazon 401(k) plan, we found $640 million in military weapon investments, accounting for over 2.5% of total plan assets.
That includes $22 million in Lockheed Martin, $36 million in RTX, $13 million in Northrop Grumman, $13 million in General Dynamics, and $27 million in Boeing.

Is this what workers want?

In recent years, employees at some tech companies have made public calls for their employers to drop military contracts, as well as work with Immigration and Customs Enforcement. Do these employees know about military weapons in their 401(k)?

Remember, it’s not just about cutting ties to the military industrial complex. Investing in military contractors is a risky bet for your portfolio. Weapon makers can face reputational risk, litigation risk, sanctions, export restrictions, or outright bans when their products are connected to human rights violations or humanitarian crises. The evidence suggests that sustainable weapon-free investing can offer comparable returns with lower volatility.

Sustainable, weapon-free funds

Weapon-free investing has been a pillar of sustainable investing for decades. There are a healthy number of funds, across a range of asset classes, that exclude weapon investments for both financial and ethical reasons. There are weapon-free stock funds and weapon-free bond funds. There are U.S. and international weapon-free funds. There are target date funds, even index funds that exclude weapons. Many of these funds follow a holistic approach to sustainable investing that also considers climate change and other environmental and social issues.

We built our free tool Weapon Free Funds to help people know what they own and find sustainable, weapon-free funds that offer comparable returns and fit their investment circumstances. Our database tracks thousands of mutual funds and ETFs, rating them on their exposure to military contractors, nuclear weapons, and other controversial weapons like land mines and cluster bombs. You can also see exposure to fossil fuels, prisons, and other issues at the same time.

With 401(k)s, you may be restricted to a short list of funds, none of which avoid military weapons. In that case, it’s time to get organized with your colleagues and ask for sustainable funds to be added to your 401(k). We’ve got a toolkit to get you started.

It’s sobering to realize our financial connections to human rights violations and civilian deaths in violent conflicts. But by investing weapon-free, we can start to cut our financial ties to war and militarism. Check out Weapon Free Funds at www.weaponfreefunds.org.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

The Humanitarian Impacts and Investment Risks of Conventional Weapons

Sat, 05 Apr 2025 05:00:00 -0400

This article was originally posted at Ploughshares.org.

Last month, I wrote about how ethical investors try to avoid companies involved with the production of controversial weapons that inflict indiscriminate harm on civilians. But it’s more common for arms makers to be involved in the production of so-called conventional weapons that are designed to destroy specific military targets. Unfortunately, conventional weapons are often used indiscriminately and in violation of international law, eroding the distinction between the two labels.

Humanitarian impacts of nuclear and other controversial weapons

A single nuclear explosion can kill hundreds of thousands of people instantly and give long-term health problems to thousands more from radiation exposure. A full-scale nuclear exchange has the potential to end civilization as we know it. In the past, fear of that worst-case scenario led nuclear powers like the U.S. and Russia to sign arms reduction treaties. Today, those treaties are fraying, and scientists are sounding the alarm of the increasing likelihood of nuclear weapons use.

Other controversial weapons like cluster bombs and landmines can kill and maim civilians for years after conflicts end. Because of these humanitarian concerns, these weapons are banned by most countries under various treaties.

Humanitarian impacts of conventional weapons

In comparison, targeted weapons that aim to destroy specific military targets are designed to be more humane. The language we use reinforces their purported precision and discrimination – “surgical” strikes delivering “smart” bombs.

But modern conflicts still cause immense human suffering from conventional weapons, particularly when they are used with excessive force or indiscriminately against civilians, in violation of international human rights law. New York Times reporting has found that weapons made by Raytheon (now RTX Corp) were used in Saudi Arabian airstrikes that killed Yemeni civilians. The New York Times has also identified Boeing-made weapons used in recent attacks that killed civilians, including an Israeli airstrike on a United Nations-run school in central Gaza.

Another concern is proliferation. Military weapons get exported to regimes with poor human rights records who use them against their own citizens to suppress dissent. They also end up in the hands of paramilitary or terrorist organizations with few scruples about using them indiscriminately. The Sudanese civil war has killed tens of thousands of civilians amid accusations that outside weapon flows are fueling the conflict.

The dangers can long outlast the fighting. Despite the Vietnam war ending more than 50 years ago, there is still ongoing harm from unexploded ordnance in Laos, the most bombed country per capita. Some of the danger comes from controversial weapons like cluster bombs, but unexploded conventional bombs also litter the landscape. These hidden weapons have killed or injured more than 20,000 civilians over the past decades.

Investment risk of conventional weapons

Many mutual funds and 401(k) accounts invest in companies connected to conventional military weapon production. But conventional arms carry similar investment risks as controversial weapons, though the risks facing controversial weapon makers is more acute.

Many of the same institutional investors (asset managers, pension funds, etc.) that have exclusion policies for controversial weapons also exclude military weapon manufacturers more broadly. When they do, they have financial justifications as well as ethical. Weapon makers face reputational risk and litigation risk when their products are used in human rights violations or conflicts. They can face sanctions, export restrictions, or outright bans on their products. These pressures can increase the market volatility for arms maker stocks.

There’s a myth that investing sustainably and avoiding weapon makers means sacrificing returns. That’s not what the evidence says – sustainable investing can offer comparable returns, even with ethical exclusions. A recent Morgan Stanley study found that “investing a hypothetical $100 into a sustainable fund in December 2018 would equate to $136 today, while investing $100 into a traditional fund over the same period would equate to $131 today.”

A message of hope

A few years ago, on a trip to Laos, I was awestruck by the county’s natural beauty; hundreds of miles of lush forest and river valleys. But I also encountered something I was not prepared to see: the prevalence of unexploded ordinance and shrapnel from conflicts ended decades ago.

Despite the lingering tragic remnants of war, the resilience of the Laotian people was undeniable. Bomb shells were repurposed as boats. Metal bomb shrapnel was molded and shaped into jewelry sold at the local riverside shops. I even came across a flowerbed made from a U.S. bomb shell. It was a striking metaphor: destruction repurposed into life, a symbol of resilience, renewal, and hope.

While conventional weapons may be more targeted than indiscriminate controversial weapons, the humanitarian impacts of their usage have proliferated across the world. But there’s hope for a peaceful future: we can cut financial ties to militarism and invest in peace and people over war and violence. Visit Weapon Free Funds to learn how to move your money out of military weapon manufacturers.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

The Ethical and Financial Risks of Investing in Controversial Weapons

Wed, 12 Mar 2025 05:00:00 -0400

This article was originally posted at Ploughshares.org.

Many military weapons are considered controversial weapons due to the indiscriminate harm they cause to civilians, violating international humanitarian principles. Investing in controversial weapons makers doesn’t just threaten global peace – it also threatens your savings. Beyond the systemic risk to the global economy that a nuclear conflict would bring, there are regulatory, reputational, and compliance risks that could impact the future profitability of controversial weapon makers.

What makes some weapons more controversial?

Ethical and sustainable investors have adopted a range of definitions of controversial weapons, but in general, these definitions define controversial weapons as those that are banned or regulated under international agreements, due to the potential for civilian or long-lasting damage. Almost all definitions include nuclear weapons. Experts agree we are facing the highest nuclear danger since the Cold War. Any use of nuclear weapons would violate fundamental rules of international law and have catastrophic humanitarian and environmental consequences.

Other controversial weapons commonly targeted for exclusion include cluster munitions, anti-personnel landmines, incendiary weapons, and depleted uranium. What all these weapons have in common is their indiscriminate impacts, making them particularly deadly to civilians. Unexploded cluster bomblets and landmines kill and maim civilians for years after conflicts end. The use of depleted uranium ammunition is linked to increased cancer rates and birth deformities. Because of these humanitarian concerns, these weapons are banned by many countries under various treaties.

What are the financial risks of investing in controversial weapons?

To make the world a more peaceful place, countries have adopted international treaties restricting weapons production, trade, and use, and implemented stricter arms export controls.

Here’s the problem: If you are like most mutual fund investors, embedded in your portfolio are military contractors producing weapons that are banned by these international treaties. The “own the market” approach of popular index funds basically guarantees that some of your savings will flow into companies involved with nuclear and other controversial weapons.

Failing to comply with international arms control treaties not only exposes these companies to potential legal consequences but also poses serious financial stability issues stemming from reputational risk. Products that jeopardize human life and are connected to significant negative humanitarian impacts are rightfully under scrutiny by ethical investors, driving growing international pressure to align investments with ethical sustainability standards. This has led financial institutions to adopt exclusion policies for weapons makers and limit funding to companies involved with controversial weapons. For example, many global banks have policies to not offer loans to companies that make products banned by governments and international treaties, making it increasingly difficult for controversial weapons makers to secure financing.

Institutional investors (including pension funds, endowments, and sovereign wealth funds) also frequently have ethical investment guidelines and exclusion policies for controversial weapons. And it’s not only large asset owners moving away from weapons makers; more and more, individual savers and 401(k) plan participants are shifting their investments to align with their values by seeking out funds that exclude arms manufacturers.

It’s not just companies that make the actual weapons that are considered controversial. Many investors with ethical guidelines also look to exclude companies that make products that are critical to the delivery or maintenance of controversial weapons. If a company makes parts for a plane or missile that could be used to deliver nuclear weapons, it may be excluded under these guidelines. All of this puts pressure on company stocks and makes them riskier investments.

Case study: Norwegian pension fund excludes General Dynamics

The Norwegian Government Pension Fund Global (GPFG) is one of the world’s largest sovereign wealth funds, managing more than $1.6 trillion in assets. Known for its robust ethical guidelines, GPFG aims to exclude companies connected to controversial weapons production, human rights violations, and environmental harm. Just last year GPFG moved to divest its 1% holding ($739 million) in General Dynamics due to the company’s role in the production of strategic submarines used to launch nuclear ballistic missiles. This divestment decision sends a strong signal to the market about the growing financial and ethical risks of investing in controversial weapons.

What responsible investors can do

Controversial weapons represent clear ethical risks, and they’re also an increasingly risky financial bet for investors. So, how can we help build a more peaceful world by shifting our investments away from war and violence?

A great place to start is by visiting Weapon Free Funds. You can use our free online tool to check if your retirement plan or mutual funds include controversial weapons manufacturers, and to find socially responsible funds that avoid weapons makers. Our site also includes an action toolkit you can use to help shift your savings. We all have the power to prioritize peace and people over war and violence.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

University Retirement Plans are Funding the Destruction of their Students’ Future

Thu, 06 Feb 2025 04:00:00 -0500

Employer-offered defined contribution retirement plans, like 401(k)s and 403(b)s, are designed to help workers save for retirement by letting them choose from different plan options to invest contributions from their paycheck, often with a match from their employer. Many might associate these plans with corporate workplaces, but non-profit institutions like universities offer them as well. Unfortunately, like corporate retirement plans, university plans are often heavily exposed to risky investments in fossil fuels, military weapons, and the prison industrial complex.

We analyzed 10 defined contribution plans offered by five large universities: Columbia, Harvard, Northwestern, Princeton, and Notre Dame. Retirement plans use a Form 5500 to report their investments to the SEC. By cross-referencing 5500 filings with data on mutual fund holdings, we found that billions of dollars in university employee retirement savings are invested in companies with significant environmental and social risks: fossil fuel companies like ExxonMobil, military weapon manufacturers like RTX Corp, and private prison operators like CoreCivic.

Figure 1: University defined contribution plan investments in fossil fuels, military weapons, and prison industrial complex companies. Details on the plans analyzed are in the methodology section below.

TIAA CREF and Vanguard

Two main culprits emerged – TIAA CREF variable annuities, and Vanguard Target Retirement funds.

TIAA CREF variable annuities - Variable annuities are technically insurance products, but they are structured similarly to mutual funds, with an underlying portfolio of stocks and bonds. CREF annuities from TIAA control substantial percentages of all the defined contribution plans analyzed and are responsible for a significant amount of the overall exposure to fossil fuels, weapons, and prisons.

Vanguard Target Retirement - Target date funds from Vanguard are responsible for another significant chunk of risky investments. These funds are built from index funds that invest in every company traded on stock markets, virtually ensuring there will be exposure to fossil fuels, weapons, and prisons.

The chart below shows the breakdown of fossil fuel investments to show how much is coming from TIAA CREF variable annuities and Vanguard Target Retirement funds. For four of the five universities, over 60% of fossil fuel investments come from these two fund groups.

Figure 2: University defined contribution plan investments in fossil fuels, broken down by fund groups.

Your savings, your choice

Investments in 401(k)-style plans are separate from those made by university endowments, or other university retirement systems like defined benefit pension plans, both of which also invest heavily in fossil fuels, weapons, and prisons. What’s different about 401(k)-style plans is that participants have a choice in where to direct their savings.

In fact, all the defined contribution plans we analyzed offer sustainable options with reduced exposure to these risky sectors. But few participants seem to avail themselves of those options, as investments in sustainable funds are dwarfed in comparison to the amount invested in non-sustainable CREF annuities, Vanguard target dates, and other funds.

Figure 3: University defined contribution plan investments in funds that market as sustainable investments.

Educators are investors

Fossil fuels, weapons, and prisons are risky investments not only to the stakeholders impacted by those companies’ operations, but also to their own investors, as their negative environmental and social impacts pose material investment risks. Professors and employees of major universities are (perhaps unwittingly) directing their investments into these risky sectors, with the help of CREF annuities and Vanguard target date funds.

Do these institutions understand that they are out of alignment with their own stated sustainability and justice statements? Do educators understand the financial risks involved? Do they believe these investments are in alignment with their commitment to their students? Do students understand their teachers are profiting from destructive industries?

Educators: take control of your savings!

Universities should consider the impacts of managing their retirement systems in a way that destroys the future their students are supposed to graduate into. Is this in alignment with their fiduciary duty to manage their retirement plan in the best interest of plan participants?

The negative environmental and social impacts of fossil fuels, military weapons, and private prisons pose material investment risks. Universities have a responsibility to address this risk by ensuring employee savings are invested with a view towards long-term sustainability.

Educators and university employees have the power to change where their investments are directed. They can find sustainable options in their plan with reduced exposure to risky sectors, and they can work with their colleagues to advocate for a more sustainable retirement plan.

Want to get started moving your investments? Check out our action toolkit for employees to learn what you can do to shift your savings towards sustainability.

Methodology

For this analysis, we looked at 10 defined contribution plans from five major US universities. Many employers offer multiple defined contribution plans, with different groups of employees eligible for different plans.* The plans selected for the analysis are among the largest university defined contribution plans in the US. All the plans we looked at controlled over $1 billion in employee savings. A detailed profile of each plan can be found on our Retirement Plan Sustainability Scorecard.

Employer	Plan	Assets	Source data
Columbia University	Retirement Plan for Officers of Columbia University	$5,026,291,682	Form 5500
Columbia University	Columbia University Voluntary Retirement Savings Plan	$4,133,404,494	Form 5500
Harvard University	Harvard University Tax Deferred Annuity Plan	$3,765,660,720	Form 5500
Harvard University	Harvard University Defined Contribution Retirement Plan	$2,165,044,645	Form 5500
Harvard University	Retirement Income Plan for Teaching Faculty of Harvard University	$1,763,325,967	Form 5500
Northwestern University	Northwestern University Retirement Plan	$4,022,176,874	Form 5500
Northwestern University	Northwestern University Voluntary Savings Plan	$1,097,583,063	Form 5500
Princeton University	Princeton University Retirement Plan	$2,131,527,701	Form 5500
Princeton University	Princeton University Retirement Savings Plan	$1,532,776,551	Form 5500
University of Notre Dame	University of Notre Dame 403(b) Retirement Plan	$2,360,767,219	Form 5500

We grouped the plans by employer for the purpose of tracking investments in fossil fuels, military weapons, and prisons. To track investments, we used the Form 5500 filings, which list the investments of each plan. All the Form 5500 filings we used are the most recent available for these plans, filed in 2024.

We mapped the investments in these filings to our database of mutual fund holdings and then cross-referenced these holdings with our database of fossil fuel companies, military weapon manufacturers, and prison industrial complex companies. (For this analysis, we used our “high risk” list of prison industrial complex companies – companies with a high level of involvement in prison industrial complex activities.) The mutual fund holding data is the most recent available as of 31 Dec 2024.

Figure 1 represents the aggregate USD amount invested in stocks from these companies across all the plan options offered by each employer’s plans. Some investments are classified under more than one category (e.g. a company active in both military weapon manufacturing and the prison industrial complex), so the sum of the three totals (fossil fuels, weapons, prisons) may be more than the total investment amount by the university plans. The figures show equity ownership, and do not include bonds issued by companies involved in these sectors.

Figure 2 represents the breakdown in fossil fuels investments across three groups: fossil fuel investments coming from CREF variable annuities, from Vanguard Target Retirement funds, and from other plan options. The CREF variable annuities group includes the CREF Stock Account, the CREF Growth Account, the CREF Global Equities Account, the CREF Equity Index Account, and the CREF Social Choice Account. The Vanguard Target Retirement group includes the Vanguard Target Retirement 2070 Fund, 2065 Fund, 2060 Fund, 2055 Fund, 2050 Fund, 2045 Fund, 2040 Fund, 2035 Fund, 2030 Fund, 2025 Fund, 2020 Fund, and Income Fund.

Fossil fuel investments (in USD)

Employer	TIAA CREF variable annuities	Vanguard Target Retirement	Other plan options	Total
Columbia University	128.2 M	186.8 M	154.7 M	469.7 M
Harvard University	79.4 M	213.9 M	98.7 M	392.1 M
Northwestern University	56.2 M	0.0 M	160.8 M	217.1 M
Princeton University	69.4 M	51.5 M	68.6 M	189.5 M
University of Notre Dame	23.5 M	61.2 M	35.6 M	120.4 M

Military weapon investments (in USD)

Employer	TIAA CREF variable annuities	Vanguard Target Retirement	Other plan options	Total
Columbia University	51.4 M	61.8 M	57.3 M	170.6 M
Harvard University	31.1 M	70.8 M	34.3 M	136.2 M
Northwestern University	22.6 M	0.0 M	66.3 M	88.9 M
Princeton University	28.0 M	17.0 M	29.9 M	75.0 M
University of Notre Dame	9.5 M	20.3 M	13.5 M	43.2 M

Prison industry investments (in USD)

Employer	TIAA CREF variable annuities	Vanguard Target Retirement	Other plan options	Total
Columbia University	12.8 M	22.6 M	24.7 M	60.2 M
Harvard University	8.0 M	25.9 M	15.0 M	48.9 M
Northwestern University	5.7 M	0.0 M	28.7 M	34.4 M
Princeton University	7.1 M	6.2 M	13.2 M	26.6 M
University of Notre Dame	2.4 M	7.4 M	6.1 M	15.9 M

Sustainable fund investments (in USD)

Employer	Sustainable funds	Non-sustainable funds
Columbia University	172.1 M	8,790.9 M
Harvard University	146.4 M	7,266.8 M
Northwestern University	88.3 M	4,389.4 M
Princeton University	91.7 M	3,557.5 M
University of Notre Dame	26.3 M	2,210.5 M

A full description of our methodology for analyzing defined contribution plans can be found here.

* Harvard University offers an additional defined contribution plan, the Harvard University Retirement Plan, with over $1 billion in assets. This plan combines participant-directed accounts with non-participant directed accounts, so it was excluded from this analysis.

Andrew Montes

Director of Digital Strategies, As You Sow

You Might be Invested in Military Weapon Manufacturers

Tue, 04 Feb 2025 08:00:00 -0500

This article was originally posted at Ploughshares.org.

What if I told you your hard-earned retirement savings are likely invested in companies that manufacture weapons of war? If that doesn’t sit right with you, you’re not alone. My name is Grant Bradski, and I work at As You Sow, the nation’s leading shareholder advocacy nonprofit which works to increase corporate responsibility on a broad range of environmental and social issues. I’m passionate about my role as our Sustainable Investing Initiative Coordinator because I get to help build tools like Weapon Free Funds that empower everyday investors to align their investments with their values. Now more than ever, our Invest Your Values tools play a critical role in helping investors uncover this unfortunate truth: the savings of millions of Americans are financing arms manufacturers making nuclear missiles, cluster bombs, and other controversial military weapons used in wars and armed conflicts all over the world.

How do military weapon manufacturers end up in my retirement savings?

For many Americans savings for retirement, picking the right companies to invest in to secure your financial future can be an intimidating task. This is why most investors are invested in what are called mutual funds. You can think of a mutual fund as a basket of stocks. In each basket are shares of hundreds, if not thousands of different individual public companies. Mutual funds also invest in bonds – loans given to a company or government in exchange for regular interest payments.

These popular investment vehicles allow investors to diversify their investments, helping to ensure their portfolio grows steadily over time, regardless of the individual performance of any single company. Mutual funds are the most common investment options found in company 401(k) plans and personal portfolios. Because many mutual funds invest with an “own the entire market” strategy, companies from every sector of the economy are bundled inside these investments. This includes everything from big tech to fossil fuels, and yes, even military weapon manufacturers like General Dynamics, RTX Corp, and Lockheed Martin.

The financial and ethical risks of investing in weapons of war

While mutual funds help investors diversify their investments and reduce risk, that doesn’t mean they are risk-free. When companies have business models that produce negative environmental and social impacts, that poses serious financial and ethical risks to investors saving for retirement.

Investing in weapons manufacturers can expose investors to financial risk. Considered particularly risky to responsible investors are companies involved with nuclear weapons and other weapons that are prohibited by international treaties, including, incendiary weapons, cluster munitions, and anti-personnel landmines. For example, Boeing and RTX Corp are involved in the production of U.S. nuclear-armed missiles. Beyond the regulatory risk to these companies, weapons makers are also in constant jeopardy of reputational harm due to the destructive nature of their products.

Conscious investors may also be concerned about the humanitarian impacts of conventional military weapons, as well as potential violations of international human rights laws. Reporting from the New York Times has identified Boeing-made weapons used in attacks that killed civilians, including an Israeli airstrike on a United Nations-run school in central Gaza. Previous New York Times reporting has found that weapons made by Raytheon (now RTX Corp) were used in Saudi Arabian airstrikes that killed Yemeni civilians. Many ethical investors may find themselves asking: how do I avoid investing in products that destroy life?

There’s help on the way

Fortunately, there are tools that can help. Weapon Free Funds is a free investment transparency tool built to help responsible investors prioritize peace and people over war and violence. Leveraging research from non-profits and ethical investment firms, we identify investor-owned companies involved with arms manufacturing, which are then cross-referenced with the holdings of thousands of mutual funds and exchange-traded funds.

In a coming post, we’ll dive more in the specific risks of weapons investments. In the meantime, you can get started on your ethical investing journey now on Weapon Free Funds. Our site also includes an action toolkit investors can use to help shift their savings away from weapon investments. We all have the power to make a change and invest in a peaceful future.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

How Google found a fossil free fund for their 401(k)

Tue, 12 Nov 2024 08:00:00 -0500

Is your employer doing enough to protect your financial future from climate change? Many U.S. employees saving for retirement are unknowingly invested in companies fueling the climate crisis, exposing their savings to climate-related financial risk and in misalignment with their values. Employees are increasingly calling for climate-safe fund options to avoid these risks.

Employer-sponsored 401(k) and other retirement plans have a legal responsibility to always act in their employees’ best interest by mitigating financial risk and maximizing returns. As shareholder advocates, As You Sow has engaged over a dozen companies including recently Google, asking for disclosures on how they’re protecting employee savings from climate risk. Unfortunately, some companies are still offering outdated and misguided excuses about “fiduciary duty” to explain why they aren’t taking steps to protect employees. The reality is that offering climate-safe sustainable funds is the best way to satisfy fiduciary duty and protect plan participants and administrators.

Department of Labor: Fossil free 401(k)s are OK

The Department of Labor (DoL), the regulator for employer-offered retirement plans, mandates that financial returns are paramount: Plan administrators “may not sacrifice investment return to promote goals unrelated to the interest of plan participants.”

Does this mean climate change can’t be considered? Not at all. The fact is that climate change is a material factor that affects the returns of investments. To deny that climate change is related to the interest of plan participants is to ignore the large and growing body of evidence showing that climate-safe investing is the smart approach financially.

To leave no room for doubt, the DOL issued a clarification stating clearly that plan fiduciaries can indeed consider climate change (as well as other environmental, social, and governance factors) when making investment decisions.

Adding climate-safe sustainable options can reduce financial risk

When you get into the numbers, it’s clear why climate change should be considered as a factor in investing. Recent estimates suggest that climate-related damages are already costing the global economy an estimated $16 million per hour. Fossil fuels are responsible for the vast majority of greenhouse gas emissions, fueling the climate crisis, but they’re also an increasingly risky sector to invest in. Oil and gas has been the lowest performing sector of the U.S. economy over the past decade.

The financial losses could be staggering. Our recent report with researchers from the University of Waterloo found more than 2 million employees from 12 tech-sector companies could have earned an estimated $5.1 billion in additional returns had their retirement plan holdings been made fossil-free 10 years ago. Because nearly all retirement investors are invested in fossil fuel companies through the mutual funds in their retirement plans, most have no idea they are exposed to climate-related financial risks.

Plan fiduciaries and beneficiaries don’t have to choose between returns and managing climate risk. In recent years, 1,500 institutions, representing more than $40 trillion in assets, have committed to reducing exposure to investments in high-carbon industries, many of them specifically citing long-term financial risk and the expectation that this decision will have a positive financial and risk-reducing impact on financial performance in the long run.

Google’s search for better returns leads to sustainable funds

One of a fiduciary’s key responsibilities is to manage the list of plan options, to make sure they are maximizing returns for participants. Recently, Google’s 401(k) added a new sustainable fund – one that consciously considers climate change in portfolio management and proxy voting. We recently spoke with Alex Wright-Gladstein, founder and CEO of Sphere, a fossil-free fund manager, about what spurred Google’s move.

“Alphabet offers a climate-safe fund option whereas many plans offer none, and the process the company’s benefits team followed for adding the climate-friendly fund sets a great example.”

To find a new fund option for its retirement plan, Google’s benefits team focused on their fiduciary duty to maximize benefits and minimize risk.

“They wanted to replace an existing fund that was underperforming, a common practice among 401(k) plan managers, and in doing their due diligence to maintain their fiduciary duty, they found that a fossil-free fund was the best replacement.” says Wright-Gladstein. “This assessment was made strictly on financial grounds, including because the fossil-free fund had been performing well compared to its non-fossil-free peers. The Google benefits team has demonstrated that it knows you don’t have to trade off returns to offer climate-safe investments.”

Google now offers the Parnassus Core Equity Fund as a sustainable option in its core fund lineup. Sam Gooch, a program manager at Waymo, a Google subsidiary, had this to say about the plan’s shift:

“The Parnassus fund that Google recently added to its lineup shows that a divested 401(k) fund can still meet the requirements for fiduciary duty. While this is a big step in the right direction, the fund has relatively high fees and is not a target date index fund, so it is probably not suitable for most investors’ needs.”

There’s still room for Google to do more. Approximately 66% of Google plan assets are held in the company’s default option, the Vanguard Target Retirement Fund series, which deliberately ignore climate change as an investment factor. Our recent study found that Google employees missed out on $1 billion due to its 401(k) plan investments in fossil fuels. While Google has taken positive steps, Sam Gooch and his fellow employees are still pushing the company to make progress towards a climate-safe retirement plan by adding a climate-safe target date option:

“Over 1,200 employees requested that a fossil fuel-free target date index fund be added to the lineup in early 2024 but have yet to hear back from the Google benefits team.”

Taking action

In a rapidly warming world, plan fiduciaries should be working to mitigate their participants’ exposure to climate-related financial risk by offer climate-safe sustainable options in the core plan lineup.

Want to get started? Visit our action toolkit for plan administrators to learn how you can protect your plan participants from climate risk while supporting a safe, just, and sustainable future for all.

Alex Wright-Gladstein is the CEO and founder of Sphere, which manages the Sphere 500 Fossil-Free Index which tracks the Top 500 US companies by market capitalization and excludes fossil fuel companies to avoid stranded asset risk.

Grant Bradski

Sustainable Investing Initiative Coordinator, As You Sow

Fossil Free Funds | Blog

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Investors should look past the headlines

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Risks of ignoring workplace equity

Advancing workplace equity with Social Justice Funds

Why aligning portfolios with inclusive workplaces matters now

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Why racial justice transparency and disclosure matters

What companies are saying in 2025

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Correlating fund returns with diversity, equity, and inclusion

What it means

Methodology

Introducing Social Justice Funds

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Taking action

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Employees are already keeping billions out of fossil fuels via their 401(k)s

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How we did the analysis

What to do if your insurance company is supporting fossil fuels

Drop the policy, not the planet

Step 1 – Find out if your insurer is supporting fossil fuels

Step 2 – Search for green insurance solutions

Step 3 – Check your investments for insurance companies supporting fossil fuels

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Humanitarian impacts of nuclear and other controversial weapons

Humanitarian impacts of conventional weapons

Investment risk of conventional weapons

A message of hope

The Ethical and Financial Risks of Investing in Controversial Weapons

What makes some weapons more controversial?

What are the financial risks of investing in controversial weapons?

Case study: Norwegian pension fund excludes General Dynamics

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University Retirement Plans are Funding the Destruction of their Students’ Future

TIAA CREF and Vanguard

Your savings, your choice

Educators are investors

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Methodology

You Might be Invested in Military Weapon Manufacturers

How do military weapon manufacturers end up in my retirement savings?

The financial and ethical risks of investing in weapons of war

There’s help on the way

How Google found a fossil free fund for their 401(k)

Department of Labor: Fossil free 401(k)s are OK

Adding climate-safe sustainable options can reduce financial risk

Google’s search for better returns leads to sustainable funds

Taking action