Retirement plan participants may unknowingly become investors of last resort for high-carbon industries

FOR IMMEDIATE RELEASE

MEDIA CONTACT: Sophia Wilson, swilson@asyousow.org, (341) 600-1832

BERKELEY, CALIFORNIA—NOV. 29, 2023—Shareholders will soon vote on proposals at Microsoft and Campbell's asking for a report describing how the companies are protecting employees from climate risk embedded in their retirement plan investment options. As concern grows over the financial risk of high-carbon investments, companies must address their 401(k) plans’ continued contributions to climate change or risk negative effects on plan performance, brand reputation, talent acquisition and retention, and consumer retention.

Campbell’s and Microsoft have made public greenhouse gas emissions reduction commitments for their operations and value chains. Yet both are investing billions of employee dollars into fossil fuels producers, companies responsible for rainforest destruction, and other high-emission sectors. 

A recent report shows that the average 401(k) is responsible for 33 times more emissions than the company itself. To support the transition towards a low-carbon economy, companies across the U.S. need to address the climate impacts of their retirement plans.

“We have seen thousands of institutional investors across the country commit to reducing exposure to investments in high-carbon industries,” said As You Sow CEO Andrew Behar. “It is now time for companies to join the movement and protect their employees’ life savings from these same risks before they become investors of last resort for fossil fuel companies.”

When 401(k) fund options fail to adopt climate risk mitigation practices, they generate climate risk in workers’ portfolios, including transition risk as markets shift towards a low-carbon economy and long-term systemic portfolio risk. These risks can particularly impact younger employees, who are further from retirement and will spend more time in the market.

As You Sow’s shareholder proposals point to an employer’s fiduciary duty to manage retirement plan risk. If plan administrators fail to consider all material risks, including climate, they may be compromising their legal obligation to select retirement plan investment options in the best interests of its plan participants.

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As You Sow is the nation’s leading shareholder representative, with a 30-year track record promoting environmental and social corporate responsibility and advancing values-aligned investing. Its issue areas include climate change, ocean plastics, pesticides, racial justice, workplace diversity, and executive compensation. Click here for As You Sow’s shareholder resolution tracker.