Ask for help finding the best choices. The advisor may say no if you tell them to invest in a specific fund because it has a short or rocky history, so you may need to be patient as they find a better alternative. The goal is to remove the risk, not a specific fund; focus on risk, especially future risk, as well as returns. If they’re being lazy or unwilling to help you with this transition, find a new advisor. If your broker is tied to a big-name brand, they may only be able to offer products that the particular company has approved. If you want innovation, you might need a new advisor.

We've collected a set of resources that can help you get started on your fossil free investing journey. From financial consulting firms, to educational resources, to research providers, these resources explain the details of socially responsible financial investing, and help to ensure you're working with firms that are aligning your investments with your values.

As millennial-aged employees now represent the majority of the U.S. workforce, it is increasingly important that corporate management finds ways to engage them in the company. Creating defined contribution plans which connect to their core values – like solving human, social and environmental problems through their work and investments – can spur employee engagement and spark innovation.

Furthermore, adding ESG funds to an organization’s employee contribution plan enables a corporation to align its stated climate, environmental, social, and other sustainability policies, including adoption of U.N. Sustainable Development Goals (SDGs), and the U.N. Principles of Responsible Investing (UNPRI) with its investment options. The oft-heard phrase, “put your money where your mouth is” has never been truer or easier to implement.

Between 2012 and 2016 the market for mutual funds and exchange traded funds (ETFs) with an Environmental, Social, or Governance (ESG) focus has increased $4.98 trillion, up to $8.72 trillion, a growth of over 133%.[i] The benefits of including ESG considerations in investment decisions have become more widely understood and the market has responded by increasing investments in funds that include these concerns in their prospectus and holdings. In addition to the potential financial upside of ESG investments, a growing number of investors are moving to ESG-oriented funds as a way to reduce risk and incorporate their values in their investment decisions. This is largely driven by the increasing proportion of millennials in the workforce. A whopping 85% of millennials surveyed in the 2016 U.S. Trust study, “Insights on Wealth and Worth,” said they consider their investment decisions as “a way to express their social, political, and environmental values.”[ii]

Despite the growth of ESG-oriented funds in the wider investment market, the $8.4 trillion in U.S. corporate defined contribution plans (including 401(k), 403(b), and IRAs) do not reflect this growth and in fact have barely begun to include ESG funds in their portfolios.[iii] As an example, Vanguard reported that only 9% of its employee plans included ESG funds, most of which offered only a single fund rather than a suite of offerings.[iv] This discrepancy provides a tremendous opportunity for corporate plan administrators to align corporate values and sustainability goals with investments, while simultaneously enticing new employees, retaining existing ones, and increasing participation and contributions through a simple change in policy.

A recent 2015 Department of Labor ERISA guidance document indicates that considering ESG issues when making investments is not only allowed as part of a fiduciaries’ consideration, but where such issues may directly affect the economic value of an investment, fiduciaries should appropriately consider such factors.

This white paper highlights case studies and recent investing trends demonstrating the benefits of incorporating ESG options into corporate defined contribution plans. It shows that those corporations providing a greater array of ESG mutual funds and exchange traded funds (ETFs) in their plans will benefit from overall corporate coherence of policy and practice and facilitate a shift in corporate culture to respect and amplify employee values. This leads to material benefits for both the company and the employees, is relatively simple to implement once an executive decision is made to make such an adjustment, and is most successful when employees are part of the process from the beginning and through implementation.

Thanks to R. Paul Herman, founder and CEO of HIP Investor which rates 401(k) plans for fossil free and sustainability, for his assistance in writing this toolkit and to Rob Thomas of Social(k) and Timothy Yee of Green Retirement for reviewing it.