Moving Sustainable Investment Funds Into U.S. Defined Contribution Plans

Without clear regulatory guidance, obstacles to sustainable fund adoption will be challenging to overcome.

Boston, March 26, 2020 –Environmental, social, and governance models withinU.S. 401(k) plans represent less than one-tenth of 1% of all 401(k) assets; furthermore, only 4% of 401(k) plans have an ESG fund available. Starting from this embryonic stage and given the extensive and deep institutional and consumer demographic changes at play, we could very well see ourselves on the cusp of a long-term integration of sustainable models into 401(k) plans. However, it will take several years, through many peaks and troughs.

This report focuses on the opportunities and challenges associated with the integration of sustainable investment models within U.S. 401(k) plans. It is based on in-depth Aite Group interviews with CEOs and/or executive managers of 12 firms in the United States during January and February 2020.

This 23-page Impact Report contains five figures and four tables. Clients of Aite Group’s Wealth Management service can download this report, the corresponding charts, and the Executive Impact Deck.

This report mentions American Century, Bank of America, BlackRock, Boston University, Calvert Research and Management, Community Capital Management, Dana-Farber Cancer Institute, Dollar Tree, ERISA, First Affirmative Financial Network, Governance and Accountability Institute, Green Retirement, Green Streets Initiative, HubSpot, Investment Company Institute, Morgan Stanley, Morningstar, Natixis, Parnassus Investments, Plan Sponsor Council of America, Principles for Responsible Investment, Social(k), Tech Networks of Boston, Tesla, TIAA-Cref, U.S. Department of Labor, U.S. Government Accountability Office, US SIF, Vanguard, and Vestwell.

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