BERKELEY, CA - July 27, 2021 (Investorideas.com Newswire) Today, As You Sow released a new Corporate 401(k) Sustainability Scorecard that grades companies like Amazon.com on their retirement plan investments. Employee retirement savings in these plans are invested in companies which directly contradict publicly stated corporate sustainability goals on climate change and racial justice.
"Amazon is working to address climate risk in their operations by purchasing 100,000 electric vehicles and powering their data centers with renewables. Given all of that work, it is very strange that Amazon employee's savings are invested in companies literally burning down the Amazon rainforest," said Andrew Behar, CEO of As You Sow.
"I'm sure when Jeff Bezos gazed down at planet Earth during his space junket and saw the Amazon Rainforest on fire, he did not say to himself, 'I see that, our 401(k) plan must be making terrific returns.' That's the point, no one knows what investments they own or understands that we are profiting from our own destruction and adding risk to our portfolios. Once people know what they own they will demand change. Our new scorecard shines a bright light on this."
More than 100 million people are invested in retirement plans with assets exceeding $10 trillion, with much of it in funds managed by major asset managers like Vanguard, BlackRock, Fidelity, and TIAA. As You Sow has built a suite of Invest Your Values tools that show every investor precisely what they own; some funds support justice and sustainability, others are invested in extraction and risk.
Next week, As You Sow will release ads into the social media feeds of Amazon employees that link them to a detailed scorecard of their retirement plan and a call to action.
"Our hope is that the company will listen to their employees when they are demanding retirement plan options that avoid the financial and ecosystem risks of rainforest destruction and climate change," said Behar.
Amazon.com and Comcast are the first companies analyzed in the new 401(k) scorecard. Both companies have retirement plans with tens of millions of dollars invested in fossil fuels and agribusiness that are contributing to the destruction of the Amazon and Indonesian rainforests.
The risky investments were found primarily via the Vanguard Target Retirement Funds default options. For Amazon and Comcast this fund lineup held more than 50% of the plan assets. The Vanguard Target Retirement Funds also have significant investments in weapon companies and private prisons profiting from mass incarceration.
These first two scorecards will be followed by additional companies from the S&P 500. Previous research has found that few retirement plans offer sustainable investment options that avoid risk sectors like big oil, coal-fired utilities, weapons of mass destruction, cluster munitions, prisons, and companies that score poorly on gender equality.
Most employees across the nation are unaware their retirement plan investments are profiting from environmentally and socially risky companies. The financial risks include stranded assets, reputational risk, and other negative impacts of unsustainable business practices that can destroy shareholder value. The Corporate 401(k) Sustainability Scorecard emboldens employees for the first time with the tools and transparency needed to demand their employer address these risks.
"We have decades of evidence showing a positive correlation between companies with strong environmental, social, and governance [ESG] characteristics and financial return," said Matthew Patsky, CEO of Trillium Asset Management.
"It is irresponsible and a clear violation of fiduciary duty for companies to not provide robust ESG options in their 401(k) plans. Even worse is that many companies, including Amazon, have set up the default option to be the worst possible outcome for all stakeholders with the notable exception of the asset manager. Target date funds are plagued with hidden fees and investing to match broad market indices meaning the employee unknowingly is buying everything - including making investments in companies that almost everyone can agree should be avoided. Investing in the broad market indices is immoral in addition to violating fiduciary duty rules."
As You Sow has used its expertise in mutual fund sustainability analysis and extensive database of ESG-screened companies to analyze corporations' retirement plan investment options. Retirement plans are graded on seven environmental and social issues, including a breakdown of how each investment option is rated.
Two solutions are offered to address the risk of unsustainable investments - first, companies should work towards making the default investment option a sustainable fund, and second, companies should make sure sustainable investment options are at least offered in the retirement plan.
As You Sow released the 401(k) scorecard to motivate action and shift trillions of dollars away from climate and social destruction and into companies that define the new economic paradigm in a safe, just, and sustainable world.
"It's time to come together and make the decision to support an economy that is based on justice and sustainability," said Behar. "The 401(k) scorecard is giving employees across the U.S. the tools to do just that."
The Corporate 401(k) Sustainability Scorecard is As You Sow's eighth Invest Your Values online educational tool, joining Fossil Free Funds, Gender Equality Funds, Deforestation Free Funds, Tobacco Free Funds, Weapon Free Funds, Gun Free Funds, and Prison Free Funds.
As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. Learn more about us here.
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