Socially Responsible Investments

From the July 2007 issue of Benefits Canada, page 9, is an article about American pension plan sponsors and socially responsible investments:

TURNING GREEN

American plan sponsors are aware of the need for Socially Responsible Investing (SRI), and the popularity of offering an SRI option in defined contribution (DC) plans is growing, according to a survey by Mercer Investment Consulting Commissioned by the Social Investment Forum.

Currently, 19% of the DC plans surveyed offer one or more SRI mutual funds, and an additional 41% plan to do so within just the next three years. This means that 60% of DC plans in the U.S. will offer an SRI option to their participants by 2010. “The main forces behind this include the desire to align retirement plan offerings with the mission of the employer, typically a focus on social responsibility as well as internal staff recommendations and employee participant requests for SRI options,” says Craig Metrick, a consultant with Mercer Investment Consulting in New York.

It’s good to know that demand for SRI options in DC plans is growing, but it’s even more important to give plan administrators the information they need to add these options, cautions Paul Hilton, interim director social investment strategy at asset manager Calvert in Bethesda, Md.

He believes that more needs to be done in terms of educating the retirement plan industry about SRI because the survey also showed that respondents have a general lack of knowledge of SRI fund options and the variety of products available.

One plan sponsor that has given employees an SRI choice in their retirement plan is Santa Clara, Calif. – based Intel, the world’s largest semiconductor manufacturer.

“I really think it comes down to providing choices and if you want to be providing choices and if you want to be a socially responsible company,” says Dave Stangis, the company’s director of corporate responsibility.

“You can see it every day on the front page of every paper, people worried about the environment, concerned about what they can do personally to make a difference, and this is a great solution.”

- Craig Sebastiano