United States Version

1   Executive summary | 4
    A. Common misconceptions and abbreviated responses | 5
    B. Methods for implementing a responsible retirement plan | 6

2   Introduction | 8

3   Common misconceptions and possible responses | 10

4   Methods for implementing a responsible retirement plan | 20
    A. Assess existing ESG resources (as applicable) | 21
    B. Assess plan fiduciaries’ perspectives on ESG risks and opportunities | 22
    C. Update Investment Policy Statement to take ESG considerations into
       account | 23
    D. Evaluate current investment managers’ responsible investment efforts | 23
    E. Evaluate potential replacement or additional responsible investment
       managers | 26
    F. Evaluate portfolio implications | 29
    G. Communicate responsible investment changes to plan participants | 31

   Aligning Retirement Assets (ARA) Toolkit #2 is intended
   to provide more “tactical” and specific guidance for
   retirement plan fiduciaries and sponsors regarding
   responsible investment implementation methods and

   4 Aligning Retirement Assets | Toolkit #2

4 Aligning Retirement Assets | Toolkit #2
1 Executive summary

Our hope is that plan fiduciaries,                           • Incorporating ESG into                                   • ESG investing is making
or interested employees, after                                 the retirement plan might                                  a political and/or social
reading Toolkit #11 will decide that                           violate regulatory guidelines:                             statement: As clarified
shifting towards what we’ve termed                             In general, this sentiment                                 previously in Toolkit #1, socially
a “responsible retirement plan” is                             is unsupported by recent                                   responsible investment (SRI)
indeed achievable, and will then                               regulatory actions. The                                    is typically focused on values
return to this Toolkit to understand                           European Union and United                                  alignment of investments, in
the tools and processes available                              Kingdom have taken                                         particular, with respect to moral
to help the retirement plan achieve                            a regulatory direction of travel                           and/or political values held by
these goals.                                                   that not only encourages                                   investors. But ESG investing
                                                               ESG-related risk analyses,                                 and SRI investing are not the
Chances are, if you’re reading this                            but requires such analyses to                              same. While many ESG-themed
document, then the fiduciaries                                 be undertaken by retirement                                funds often avoid investments
of your retirement plan(s) are                                 plan providers. The United                                 in certain controversial sectors,
evaluating the possible inclusion                              States, on the other hand,                                 such as tobacco or firearms,
of responsible investment                                      has alternated regulatory                                  this typically reflects managers’
practices into the retirement                                  perspectives on considering                                views that the long-term growth
plan(s) offered to employees. If                               ESG factors in retirement                                  prospects of those sectors
that’s the case, then it makes                                 plans, while not explicitly                                are limited, i.e. ESG investing
sense to start by reviewing some                               declaring ESG incorporation                                is not focused on values or
common objections to ESG                                       to be against regulations.                                 moral considerations, but on
incorporation in retirement plans,                                                                                        economic considerations
as well as effective responses to                            • ESG investing increases                                    impacting risk and return.
those objections.                                              costs: As with most issues of
                                                               this nature the answer is not                            • Our investment consultant
                                                               straightforward and will differ                            doesn’t support ESG investing:
                                                               on a case by case basis. The                               Unfortunately, it appears that
A. Common
                                                               biggest factors in determining                             many consultants are unable
misconceptions and                                             the effect of ESG investing on                             or unwilling to advise their
abbreviated responses                                          costs will be the asset class,                             clients regarding responsible
                                                               vehicle type and the style of                              investment matters, either
• ESG investments reduce                                       investment being deployed                                  because they perceive that
  performance: This statement                                  (e.g. active vs. passive).                                 clients are not interested, or
  reflects a common                                                                                                       due to a perceived lack of
  misconception regarding                                        Fidelity, utilizing Morningstar                          credible ESG-related product
  the various methods used                                       fee data as of 31 December                               offerings. However, there are
  to integrate ESG factors into                                  2017, compared ESG share                                 many consultancies who have
  investment decision-making,                                    class expenses against the                               developed, or are developing,
  and how ESG integration                                        expenses of traditional open                             quite robust responsible
  differs from other responsible                                 ended funds. That comparison,                            investment practices, and if
  investment approaches. Multiple                                which included a number                                  retirement plan fiduciaries
  research studies have found                                    of asset classes, found that                             believe that the advice they
  that considering ESG factors                                   61% of the ESG share classes                             are receiving is not reflective of
  within investment decision-                                    evaluated were priced at or                              best practices in responsible
  making is not an impediment to                                 below the average expenses                               investment, then there are
  financial performance, and can                                 of the traditional fund universe                         certainly qualified firms available.
  in fact enhance performance,                                   when comparing against
  if financially material factors                                similar categories.2
  affecting underlying companies
  are identified and analyzed
  by investors.

    WBCSD & Mercer (2018). “Aligning Retirement Assets Toolkit #1”. Available at:
    Fidelity (2018). “Investing based on your principles.” Available at:

                                                                                                                      Aligning Retirement Assets | Toolkit #2 5
1 Executive summary

   • None of our competitors are                                i. Assess existing ESG                                      iii. Update Investment Policy
     integrating ESG: Depending on                              resources (as applicable)                                   Statement to take ESG
     global region, it is quite likely                                                                                      considerations into account
     that many of your competitors’                             Retirement plans often have
     retirement plans are in fact                               access to many different internal                           Presuming that the steps above
     integrating ESG factors into                               and external resources, some                                have been completed, formally
     their retirement plans. PRI offers                         of which may have ESG-related                               integrating the material ESG
     a useful listing of over 400                               capabilities and expertise                                  considerations identified by
     asset owner signatories3 to the                            that fiduciaries may not have                               committee members into the
     Principles as of early 2019, with                          taken advantage of previously,                              retirement plan’s Investment
     86 signatories identified either                           including internal expert staff,                            Policy Statement (IPS) will provide
     as retirement or pension plans                             investment managers, and/or                                 a framework to inform future
     (although a number are public                              investment consultants. A useful                            investment analyses and both
     plans). A recent PlanSponsor                               first step to take is to inquire                            asset allocation (for DB plans) and/
     analysis shows survey data                                 about responsible investment                                or investment manager selection
     for retirement plan sponsors                               experience, tools and capabilities.                         processes (for DB and DC plans).
     in the United States regarding                                                                                         These policy updates provide
     their inclusion of at least one                                                                                        specific guidance to investment
                                                                ii. Assess plan fiduciaries’
     “socially responsible” (a term                                                                                         managers and advisors regarding
                                                                perspectives on ESG risks
     that is undefined in the survey)                                                                                       where the retirement plan deems
                                                                and opportunities                                           ESG factors to be material for
     fund in the plan lineup. Of
     particular note, the proportion of                         Retirement plan investment                                  investment decision-making,
     survey respondents across all                              committee members tend to be                                clarifying expectations.
     industries that offered such                               selected to serve in a fiduciary
     a fund is far greater, at 8.4%,                            role because of the experience                              iv. Evaluate current
     than the proportion of Fortune                             or perspective they bring to                                investment managers’
     1000 funds that responded                                  the committee, and many
     to the survey, of which only                                                                                           responsible
                                                                tend to have relevant financial
     4.8% offered a socially                                                                                                investment efforts
                                                                sector and/or human resources
     responsible fund.4                                         experience. Given individuals                               The responsible investment
                                                                in such roles are likely to have                            industry is growing significantly
                                                                varying exposure to responsible                             in the range of products and
   B. Methods for                                               investment topics, and may bring                            services that are available to
   implementing a responsible                                   particular perspectives into such                           investors. However, it can be
   retirement plan                                              discussions, it can be helpful to                           challenging for retirement plan
                                                                hold an educational session for                             fiduciaries to assess the ESG
                                                                committee members, and then                                 quality of investment funds
   Presuming that retirement
                                                                issue a confidential survey to                              without access to third-party tools
   plan fiduciaries have decided
                                                                individual fiduciaries to assess                            and ratings. Some investment
   to incorporate responsible
                                                                their views on material long-term                           consultants offer ESG ratings of
   investment approaches into the
                                                                ESG risks and opportunities.                                individual investment strategies –
   retirement plans, what are the
                                                                The survey results will inform any                          a top-down approach assessing
   next steps? The the following
                                                                next steps on ESG incorporation                             managers’ idea generation
   suggestions are based on
                                                                the retirement plan may take.                               and portfolio construction
   successful engagements that
   project participants have had                                                                                            approaches – while many third
   in advising retirement plan                                                                                              party data providers offer issuer (or
   fiduciaries on such matters.                                                                                             company) level ESG research and
                                                                                                                            ratings – a bottom-up approach

       United Nations Principles for Responsible Investment (2019). “Search Results.” Available at:
       PlanSponsor; 2019 Defined Contribution Plan Survey.

6 Aligning Retirement Assets | Toolkit #2
1 Executive summary

evaluating a particular issuer’s ESG   vi. Evaluate portfolio                  vii. Communicate
metrics, such as greenhouse gas        implications                            responsible investment
emissions, or revenue derived from                                             changes to plan participants
controversial business practices.      Once a retirement plan has
Utilizing both perspectives in         decided to shift toward                 Once changes have been made
combination can offer useful           responsible investments, how            to the retirement plan portfolio or
information for assessing ESG          the new strategies fit within the       lineup, informing participants is
incorporation within investment        existing portfolio construction is      an important aspect of ensuring
manager strategies.                    highly important, and there are a       that the responsible investment
                                       range of options both DB and DC         changes – and the rationale behind
                                       plans can consider.                     those changes – are understood
v. Evaluate potential                                                          by participants who may wish to
replacement or additional              a. DB plans can utilize: an asset       take advantage of them.
responsible investment                    class agnostic approach, which
managers                                  designates a separate “sleeve”       While ESG investment practices
                                          of ESG assets; an asset class        have been steadily growing in
If an evaluation of the investment        specific approach, which             popularity for many years, much
strategies currently used within          determines a set amount of           of that growth and investment
either a Defined Benefit (DB) plan        assets to devote to ESG within       activity has occurred outside of
portfolio or offered as part of a         existing asset class allocations;    retirement plans, and as a result,
Defined Contribution (DC) plan            or a 100% ESG integrated             retirement plan participants have
lineup reveals that the strategies        approach, by integrating ESG         not been able to invest their
don’t offer the responsible               considerations into existing         assets in accordance with their
investment profile that fiduciaries       asset allocation, portfolio          views. We hope that this Toolkit,
deem desirable, then retirement           construction and manager             in addition to the first Toolkit
plan fiduciaries should decide which      selection/monitoring activities.     in this series, provides useful
responsible investment method(s)                                               guidance for fiduciaries and plan
fund managers should employ:           b. DC plans can add:                    administrators in considering how
                                         -- one ESG option, which can          they might integrate ESG factors
• portfolio screening, either
                                            be a good way for plan             and considerations into their
  negative or positive;
                                            sponsors to “test the waters”      retirement plans in the near future.
• ESG integration, using ESG                of offering plan participants
  factors and data to expand                an ESG fund while not
  upon fundamental research                 overwhelming them with too
  and analysis;                             many options;
• thematic investing, focused            -- an ESG tier of options,
  on offering investors focused             selecting a number of
  exposure to an explicit                   strategies that allow
  environmental or social theme;            participants to effectively
                                            diversify their ESG
• and/or active ownership, where            investments, such as a
  investors seek to use their               global active equity fund, a
  position as equity owners or              global passive equity fund
  as creditors to influence the             and a fixed income fund;
  behavior of investee companies.
                                         -- an ESG default fund, as some
Once fiduciaries have identified the        investment managers have
desired method(s) for managers              developed suitable default
to use, DB plans can then begin             fund options that integrate
to shift allocations to responsible         ESG factors into the security
investment managers. DC plans, on           selection and portfolio
the other hand, can add responsible         construction process.
investment strategies or replace
existing strategies in the lineup.

                                                                              Aligning Retirement Assets | Toolkit #2 7

   Integrating environmental, social and corporate
   governance (ESG) considerations into retirement plans
   is a growing area of interest for both retirement plan
   sponsors and participants.

88 Aligning
   Aligning Retirement
            Retirement Assets
                       Assets || Toolkit
                                 Toolkit #2
2 Introduction

Since the launch of the Aligning           #1 will decide that shifting                  retirement plan” provides
Retirement Assets (ARA) initiative         towards what we have termed a                 the nuts-and-bolts details of
in early 2018, we have tapped              “responsible retirement plan” is              how, once the considerations
into a wellspring of enthusiasm            indeed achievable and will then               outlined in Section 2 have
and engagement from among                  review this Toolkit to understand             been appropriately addressed,
members of the World Business              the tools and processes available             retirement plans can integrate
Council for Sustainable                    to help the retirement plan achieve           responsible investment
Development (WBCSD) as well                these goals.                                  approaches successfully. The
as the broader corporate and                                                             advice offered in this section
investor market. After defining the        In order to make this document                is based off of the combined
key issues, considerations and             as useful as possible to readers              experience of the ARA
actions, retirement plans can take         with different responsibilities and           Steering Committee members’
to address responsible investment          vantage points with respect to their          engagement on responsible
themes in Toolkit #1, the question         retirement plan, we have organized            investment incorporation in
remains: exactly how should                this document to facilitate shared            retirement plan contexts, and
retirement plans go about adopting         learning:                                     it highlights best practices for
responsible investment methods?                                                          fiduciaries and plan sponsors to
                                           • Section 2, “Common
This document, ARA Toolkit #2,               misconceptions and possible
is intended to build upon the                responses” highlights some of            Throughout this document,
foundation established by Toolkit            the most frequent questions              we have included several case
#1, while providing more “tactical”          and/or statements that tend              studies of companies’ experiences
and specific guidance for plan               to be raised in the context of           at various points along the
fiduciaries and sponsors regarding           responsible retirement, as well          responsible retirement plan
implementation methods and                   as potential responses to those          incorporation spectrum to help
considerations. Our hope is that             statements.                              readers gain additional contextual
plan fiduciaries, or interested                                                       understanding that may aid their
                                           • Section 3, “Methods for
employees, after reading Toolkit                                                      own company’s journey.
                                             implementing a responsible

   As a global business and financial information and news leader, innovation is at the core of Bloomberg’s business
   model, driven by a set of principles established by its founder, Michael Bloomberg.
   In line with Bloomberg’s broad offering of ESG data and tools on the Terminal, the company signed on to PRI as a
   service provider in 2009. Becoming a PRI signatory emphasized the firm’s commitment to support their clients’
   implementation of the Principles by providing and developing respective services.

   In 2015, Bloomberg’s Investment Committee worked with Mercer, the DC plan’s consultant, to perform a search for
   an ESG-driven investment option to add to their plan lineup. The search came in response to requests from some of
   the company’s key stakeholders, particularly millennial employees seeking sustainable investment options as part of
   their retirement planning.

   Four investment managers presented their strategies for plan inclusion, and the committee selected U.S.-based
   Parnassus Investments to offer their U.S. Core Equity fund to Bloomberg retirement plan participants.

   In late 2017, the committee voted to sign the PRI as a plan sponsor, making Bloomberg the first U.S.-domiciled
   corporate plan sponsor to sign the initiative.

   In accordance with the plan’s pledge, the committee incorporated a specific section on ESG integration into its
   Investment Policy Statement.

   Bloomberg’s Investment Committee continues to explore opportunities to not only meet its fiduciary duties and fulfill
   its reporting obligations to the PRI, but to further advance the practice of considering ESG factors in retirement plans.

                                                                                    Aligning Retirement Assets | Toolkit #2 9

   and possible
   Chances are, if you are reading this document, then the
   fiduciaries of your retirement plan(s) are evaluating the
   possibility of including responsible investment practices
   into retirement plan(s) offered to employees. If that is
   the case, then it makes sense to start by reviewing some
   common objections to ESG incorporation in retirement
   plans, as well as effective responses to those objections.

10 Aligning
10 Aligning Retirement
            Retirement Assets
                       Assets || Toolkit
                                 Toolkit #2
3 Common misconceptions and possible responses

If you have not done so already,                                 • Socially Responsible                                        • ESG: In terms of how strategies
we strongly suggest that you                                       Investment: Modern portfolio                                  incorporating ESG factors
review the material in the first                                   theory (MPT) – which is                                       perform, a meta-study of over
Toolkit of this series, which covers                               underpinned by the Efficient                                  2,000 primary empirical studies
the basic elements of fiduciary                                    Market Hypothesis (EMH), and                                  conducted since the 1970s
duty, regulatory considerations                                    the dominant financial theory in                              identified that approximately
and responsible investment                                         many global markets6 – dictates                               90% of these primary studies
approaches and methods, all in                                     that, were portfolio restrictions                             identified a non-negative
the context of retirement plans.                                   or screens are to be employed                                 relationship between ESG
The responses below build                                          as in an SRI portfolio, then long-                            criteria and corporate financial
upon the material presented in                                     term risk-adjusted performance                                performance, with a majority
Toolkit #1, yet are more focused                                   would be sacrificed compared                                  of those studies reporting
on responding to the specific                                      to an unconstrained portfolio.                                positive results, rather than
objections that may arise as                                                                                                     neutral.11 Furthermore, an
fiduciaries consider responsible                                 • There are indeed examples of                                  academic study analyzing a
investment approaches.                                             instances where organizations                                 sample of more than 2,000
                                                                   have divested from a certain                                  U.S. companies over a 20
                                                                   security or sector and                                        year time period has shown
                                                                   experienced worse than                                        that companies with high
A. ESG investments reduce                                          benchmark performance as a                                    performance on financially
performance                                                        result, notably in the tobacco                                material ESG issues within
                                                                   industry.7 However, more                                      their businesses12 realized an
This statement reflects a common                                   recently, the tobacco industry                                annualized outperformance of
misconception regarding the                                        has faltered8 and the validity                                over 6%, whereas companies
various methods used to integrate                                  of extrapolating from these                                   with low performance on
ESG factors into investment                                        examples to assume negative                                   material factors saw alphas
decision-making, and how                                           screening results in losses in all                            ranging between -2.9% to
ESG integration differs from                                       circumstances is not supported                                0.6%.13 Considering ESG
other responsible investment                                       by empirical evidence. In fact,                               factors within investment
approaches.5                                                       negatively screened portfolios                                decision-making is therefore
                                                                   often perform in line with                                    not an impediment to financial
                                                                   and sometimes better than                                     performance, and can in
                                                                   unscreened portfolios,9, 10                                   fact enhance performance,
                                                                   depending on the industry                                     if financially material factors
                                                                   screened, the timeframe of                                    affecting underlying companies
                                                                   assessment and the metrics                                    are identified and analyzed by
                                                                   used to evaluate performance.                                 investors.

     For a full taxonomy of approaches and methods refer to Toolkit #1.
     For a high-level overview of MPT refer to: For the purposes of this document, it is important to understand
     that MPT presumes market efficiency and is by far the most dominant investment theory, underpinning most quantitative investment models in use today.
     Daniel Thurecht (2019). “The Great Tobacco Selloff of 2018.” Seeking Alpha. Available at:
     Jeremy Grantham (2018). “The mythical peril of divesting from fossil fuels.” The London School of Economics and Political Science, Grantham Research Institute on Climate
     Change and the Environment. Available at:
     Mercer (2017). Preparing Portfolios for Transformation. Page 32-33. Available:
     Gunnar Friede, Timo Busch & Alexander Bassen (2015) ESG and financial performance: aggregated evidence from more than 2000 empirical studies, Journal of Sustainable
     Finance & Investment, 5:4, 210-233, Available at:
     Sustainability Accounting Standards Board (2019).” Find Your Industry.” Available at:
     Khan, Mozaffar and Serafeim, George and Yoon, Aaron, Corporate Sustainability: First Evidence on Materiality (November 9, 2016). The Accounting Review, Vol. 91, No. 6, pp.
     1697-1724. Available at SSRN:

                                                                                                                          Aligning Retirement Assets | Toolkit #2 11
3 Common misconceptions and possible responses

   B. Incorporating ESG into the retirement plan might
   violate regulatory guidelines                                                  Department of Labor’s
                                                                                  Field Assistance Bulletin
   In general, this sentiment is             This brief guide cannot provide      on ESG Investing
   unsupported by recent regulatory          the level of guidance and context
   actions.                                  that retirement plan legal counsel   On April 23, 2018 the US
   The United States, has alternated         can provide on this topic, however   Department of Labor (DOL)
   regulatory perspectives on                we have provided comments on         issued Field Assistance Bulletin
   considering ESG factors in                the United States retirement plan    (FAB) 2018-01 which provides
   retirement plans, while not explicitly    market below to indicate areas       guidance to the national and
   declaring ESG incorporation to be         for further investigation by plan    regional offices of the DOL’s
   against regulations.                      sponsors.                            Employee Benefits Security
                                                                                  Administration for applying
                                                                                  Interpretive Bulletins (IBs) 2015-
                                                                                  01 and 2016-01, which address
                                                                                  ESG investing and proxy voting
                                                                                  responsibilities, respectively.
                                                                                  While not overturning the prior
                                                                                  IBs14, the FAB strikes a more
                                                                                  cautious tone about ESG
                                                                                  investing than the IBs, which
                                                                                  were issued under the previous
                                                                                  administration. In particular, the
                                                                                  FAB may warrant attention by
                                                                                  plan fiduciaries in the following
                                                                                  circumstances (language in
                                                                                  quotations in the following
                                                                                  bullets is from the FAB):

                                                                                  •   The treatment of ESG
                                                                                      factors in investment
                                                                                      decision making generally.
                                                                                      The FAB clarifies that
                                                                                      ESG factors should be
                                                                                      considered based on their
                                                                                      economic or financial
                                                                                      impact on an investment
                                                                                      and non-financial ESG
                                                                                      considerations may be

12 Aligning Retirement Assets | Toolkit #2
3 Common misconceptions and possible responses

              used to choose between                                  QDIA. The FAB suggests                                      those of prudence, loyalty
              largely equal alternatives.                             that it would not be prudent                                and impartiality, when
              For example, where a                                    to designate an ESG-themed                                  considering undertaking
              fiduciary is considering the                            Target-Date Fund (TDF) as                                   a corporate engagement
              inclusion of ESG factors in                             the plan’s Qualified Default                                strategy focusing on
              the plan’s investment policy                            Investment Alternative (QDIA)                               environment or social
              statement (IPS) it would be                             “if the fund would provide                                  issues it is important that
              sensible to assess whether                              a lower expected rate of                                    the plan fiduciary can justify
              those factors contribute to                             return than available non-                                  and substantiate any related
              an analysis “based solely on                            ESG alternative target date                                 “routine or substantial”
              economic factors” and that                              funds with commensurate                                     expenses incurred as being
              “the weight given to [ESG]                              degrees of risk, or if the fund                             in the economic interests of
              factors [is] appropriate to                             would be riskier than non-ESG                               the plan.
              the relative level of risk and                          alternative available target date
              return involved compared                                funds with commensurate                               •     To the extent a fiduciary has
              to other relevant economic                              rates of return.” As such adding                            already incorporated ESG
              factors.”                                               an ESG-themed TDF as a QDIA                                 factors into its investment
                                                                      would be permissible if it has                              process, selected an ESG-
        •     The addition of so-called                               equivalent or better risk/return                            themed fund (particularly as
              ESG-themed funds15 to                                   prospects when compared                                     a QDIA), and/or engages in
              a plan’s lineup. Where a                                to available non-ESG-themed                                 active ownership practices,
              fiduciary is considering                                alternatives though reasonably                              it may be prudent to
              adding an ESG-themed                                    demonstrating the risk/return                               conduct a review of these
              fund option to its plan,                                merits of the option would                                  processes and practices in
              the FAB indicates that a                                seem to be a prerequisite.                                  view of the recent FAB.
              fiduciary should consider
              whether the option                               •      The extent to which                                   Consistent with a large and
              constitutes “a prudently                                expenses incurred by the                              growing body of research
              selected, well managed,                                 plan in exercising shareholder                        linking ESG factors to positive
              and properly diversified                                rights and/or engaging with                           company financial performance
              ESG-themed investment                                   companies in which the plan                           outcomes16, Mercer believes
              alternative” and does not                               owns stock are appropriate.                           that environmental, social and
              “require the plan to remove                             While the FAB does not alter                          governance (ESG) factors
              or forgo adding other non-                              the DOL’s position that proxy                         can have a material impact
              ESG-themed investment                                   voting is a shareholder right                         on long-term risk and return
              options to the platform.”                               which must be exercised by                            outcomes17 and therefore may
                                                                      plan fiduciaries and investment                       be an appropriate consideration
        •     The consideration of an                                 managers in accordance with                           for ERISA fiduciaries to take into
              ESG-themed fund as a                                    fiduciary duties, including                           account when determining how

     A FAB typically cannot change the substance of pre-existing regulations unless it was subject to public notice and comment, which 2018-01 was not (Source: https://www.
     Defined in the FAB as a “e.g. Socially Responsible Index Fund, Religious Belief Investment Fund, or Environmental and Sustainable Investment Fund…[and] distinguished from
     non-ESG-themed investment funds in which ESG factors may be incorporated in accordance with IB 2015-01 and IB 2016-01 as one of many factors in ordinary portfolio man-
     agement and shareholder engagement decisions.”
     E.g. the 2015 metanalysis linked in this footnote showed that the majority of over 2000 primary studies found a positive correlation between ESG factors and company financial
     performance and over 90% showed a non-negative relationship:

                                                                                                                       Aligning Retirement Assets | Toolkit #2 13
3 Common misconceptions and possible responses

          to invest plan assets.                                outperformance ratings Mercer                 different fund options, ESG-
          Mercer has been advising                              also assigns ESG ratings to                   themed or otherwise. This being
          investors of all types and                            investment strategies as part of              said, Mercer is not a law firm and
          sizes worldwide on how to                             its manager research process.                 does not provide legal advice.
          incorporate ESG factors into                          This information helps clients                Clients may wish to consult
          their investment programs                             distinguish between ESG leaders               their ERISA counsel regarding
          for well over a decade. To                            and laggards and, along with a host           the impact of the FAB, if any,
          support provision of this                             of additional analyses, supports              on the fiduciary’s investment
          advice, alongside typical                             the assessment of the merits of               processes and/or practices.

          Figure 1: History of US regulatory action related to ESG incorporation in corporate retirement plans

                    DOL IBs 94-01                                                    2015                                      2018
                     and 94-02                                                DOL IB 2015-01                             DOL FAB 2018-01

                                                       2008                                            2016
                                                 DOL IB 2008-1                                     DOL IB 2016-01

          Figure 2: A Summary of ESG-related regulatory guidance from the US DOL currently in force

                      IV. IB 2015-01 – ESG INVESTING AND ETIS                               V. IB 2016-01 – PROXY VOTING AND ENGAGEMENT

              Replaced IB 2008-01 and clarified:                                        Replaced IB 2008-02 and clarified:

              • ERISA does not prohibit fiduciaries from                                • A burdensome cost-benefit analysis is not required
                incorporating ESG factors in investment policy                            for ERISA plans to vote proxies, establish a proxy
                statements or integrating ESG-related analyses.                           voting policy, or otherwise exercising shareholder
              • Consideration of ESG criteria does not presumptively
                require additional documentation or evaluation                          • Shareholder engagement around ESG issues can
                beyond generally applicable fiduciary standards.                          result in long-term financial benefits for shareholders
                                                                                          and thus can be considered in active ownership
                                                                                          activities of ERISA plans.

                                              VI. FAB 2018-01 – CLARIFYING IBS 2015-01 AND 2016-01

              • While not overturning prior IBs the FAB strikes a more cautious tone on ESG-themed investing.

              • May require particular attention in the context of QDIAs or when incurring routine or substantial expenses to
                engage in environmental or social engagement campaigns.


14 Aligning Retirement Assets | Toolkit #2
3 Common misconceptions and possible responses

C. ESG investing increases                                             more expensive than traditional                            D. ESG investing is making
costs                                                                  approaches, the record-                                    a political and/or social
                                                                       breaking growth of responsible                             statement
As with most issues of this nature                                     investment funds in both the
the answer is not straightforward                                      European and United States
                                                                                                                                  As clarified previously in
and will differ on a case by case                                      markets, where 14719 and
                                                                                                                                  Toolkit #1, socially responsible
basis. The biggest factors in                                          7220 sustainable equity funds
                                                                                                                                  investment (SRI) is typically
                                                                       launched in 2018, respectively,
determining the effect of ESG                                                                                                     focused on values alignment of
investing on costs will be the asset                                   indicates that increasing
                                                                                                                                  investments, in particular, with
class, vehicle type and the style                                      competition among fund
                                                                                                                                  respect to moral and/or political
of investment being deployed                                           managers should drive future
                                                                                                                                  values held by investors. But
(e.g. active vs. passive). For the                                     costs down further and provide
                                                                                                                                  ESG investing and SRI investing
sake of brevity, we will focus in                                      fiduciaries a greater range
                                                                                                                                  are not the same. SRI has
this paper on fees associated                                          of options.
                                                                                                                                  traditionally focused on exclusions
with investments made in active                                   • Passive equity: ESG index                                     of disfavored companies or
or passive equity funds with the                                    funds tend to be higher cost                                  industry sectors based on moral
understanding that these asset                                      than funds tracking equivalent                                underpinnings, however similar
classes broadly will reflect the                                    market-cap weighted indices                                   motivations have frequently been
dynamics in other asset classes.                                    due to the current common                                     ascribed to any investors who
                                                                    practice amongst index                                        consider financially material ESG
• Active equity: While accessing                                                                                                  factors in investment analyses.
  data regarding the expense                                        managers of passing the
                                                                    extra costs of ESG research                                   However, such a conflation is
  ratios for ESG, active equity                                                                                                   inaccurate and inappropriate.
  strategies (or any asset                                          onto investors in these
                                                                    specialized funds. However,                                   While many ESG-themed funds
  class) can be challenging to                                                                                                    often avoid investments in
  find in many cases. Fidelity,                                     some ESG index funds have
                                                                    come to market at prices                                      certain controversial sectors,
  utilizing Morningstar fee                                                                                                       such as tobacco or firearms,
  data as of 31 December                                            below equivalent standard
                                                                    funds lately.21 This means the                                this typically reflects managers’
  2017, compared ESG share                                                                                                        views that the long-term growth
  class expenses against the                                        ESG fund expenses will be
                                                                    competitive with the average                                  prospects of those sectors
  expenses of traditional open                                                                                                    are limited, i.e. ESG investing is
  ended funds. That comparison,                                     index fund in the category, but
                                                                    they will not be the lowest cost                              not focused on values or moral
  which included active equity                                                                                                    considerations, but on economic
  strategies, found that 61%                                        option. Increasingly index fund
                                                                    managers are exploring “self-                                 considerations impacting risk
  of the ESG share classes                                                                                                        and return. Managers may take
  evaluated were priced at or                                       indexing” whereby they acquire
                                                                    third-party ESG data from                                     similar long-term perspectives on
  below the average expenses                                                                                                      certain fossil fuel sectors, which,
  of the traditional fund universe                                  multiple sources and develop
                                                                    their own specialized indices.                                based on numerous reports and
  when comparing against                                                                                                          projections,22 face an uncertain
  similar categories.18                                             This can reduce cost, as they
                                                                    are not paying the index creator                              future in a time of transition to a
  While the historical data implies                                                                                               new global energy system.
  that ESG-aligned investments                                      a fee to track the published
  in active equity need not be                                      index.

     Fidelity (2018). “Investing based on your principles.” Available at:
     Hortense Bioy (2019). European Sustainable Funds: 2018 in Review. Morningstar. Available at:
     Jon Hale (2018). Sustainable Funds U.S. Landscape Report. Morningstar. Available at:
     Funds_Landscape.pdf. Page 9.
     Hortense Bioy (2019). European Sustainable Funds: 2018 in Review. Morningstar. Available at:
     8f5366b4-9511-448e-9d19-6ae42c12c5e3%7D_2018_ESG_funds_review_final_.pdf. – “IShares and L&G launched ESG-screened core ETFs that are cheaper than most non-
     screened rivals, with ongoing charges ranging from 0.05% to 0.20% depending on the geographic exposure. The ETFs exclude companies that operate in controversial industries
     such as tobacco, weapons, and coal mining in addition to those in violation of the United Nations Global Compact principles. For the first time, investors can buy a range of sustain-
     able portfolio building-blocks without having to pay a premium for the privilege. Surely, this must be one of the strongest signals that ESG investing is fast becoming mainstream.”
     McKinsey & Company (2019). Global Energy Perspective: Accelerated Transition. Available at:

                                                                                                                             Aligning Retirement Assets | Toolkit #2 15
3 Common misconceptions and possible responses

   Again, what might be perceived                                 However, there are many                                     retirement plans investing in
   as political or values-based                                   consultancies who have                                      “sustainable, responsible and
   judgments may in fact simply                                   developed, or are developing, quite                         impact” funds grew 70%, with
   reflect a manager’s view that the                              robust responsible investment                               related plan assets growing 71%
   long-term risks of investing in                                practices, and in fact there are                            from USD $2.7 billion to USD
   such sectors may outweigh any                                  third-party surveys that rank                               $4.61 billion.26 PensionsEurope
   expected returns. It is important                              consultancies on their responsible                          conducted a survey of members
   that investors understand the                                  investment practices, most notably                          in 2018 which found that pension
   analyses supporting managers’                                  the Independent Research in                                 funds expect that the share of
   decisions on ESG topics, to                                    Responsible Investment Survey                               sustainable investments in their
   ensure that the manager’s                                      2017, which highlights both                                 portfolios will increase in coming
   perspective on long-term trends                                leading advisory firms as well as                           years, due to a combination of
   aligns with those of prospective                               individuals, based on surveys                               such investments becoming
   investors.                                                     of asset owners and asset                                   more mainstream, regulatory and
                                                                  managers.24 If retirement plan                              legislative encouragement and
                                                                  fiduciaries believe that the advice                         interest by plan participants.27
                                                                  they are receiving is not reflective                        Global trends appear to be all
   E. Our investment
                                                                  of best practices in responsible                            pointing in one direction when
   consultant doesn’t support                                     investment, then there are other                            it comes to the incorporation
   ESG investing                                                  qualified firms available.                                  of responsible investment
                                                                                                                              practices into retirement plans,
   Some consultants are unable or                                                                                             and for that reason, concerns
   unwilling to advise their clients                                                                                          over competitors not integrating
   regarding responsible investment                               F. None of our competitors
                                                                                                                              responsible investment practices
   matters, either because they                                   are integrating ESG                                         appear to be largely unfounded.
   perceive that clients are not
   interested, or because of a                                    Depending on global region, it
   perceived lack of credible ESG-                                is quite likely that many of your
   related product offerings. A 2017                              competitors’ retirement plans are
   UN Principles for Responsible                                  in fact integrating ESG factors
   Investment (PRI) paper reviewing                               into their retirement plans. PRI
   investment consulting services                                 offers a useful listing of over 400
   found that “most consultants                                   asset owner signatories25 to
   and their asset owner clients                                  the Principles as of early 2019,
   are failing to consider ESG                                    with 86 signatories identified
   issues in investment practice…                                 either as retirement or pension
   There currently seems little                                   plans (although a number are
   commercial imperative for                                      public plans). In the United
   investment consultants to extend                               States, data gathered by the
   the coverage of ESG integrated                                 US Sustainable Investment
   services among their clients.”23                               Forum indicated that between
                                                                  2014 and 2016 the number of

        United Nations Principles for Responsible Investment (2017). Working Towards a Sustainable Financial System: Investment Consultant Services Review. Available at: https://www. Page 3.
        SRI-CONNECT (2018). “Independent Research in Responsible Investment Survey 2017.” Available at:
        gory&layout=blog&id=201&Itemid=1827. NB: Free registration may be required to view results.
        United Nations Principles for Responsible Investment (2019). “Search Results.” Available at:
        Judy Faust Hartnett and Rebecca Moore (2018). “SRI Holdings in ERISA Plans Gaining Ground, but Concerns Remain.” Plan Sponsor. Available at:
        PensionsEurope (2018). PensionsEurope survey report on drivers of equity investments by pension funds. Available at:
        vey%20report%20on%20drivers%20of%20equity%20investments%20by%20pension%20funds%20-%20September%202018%20-%20FINAL.pdf. Pages 7-8.

16 Aligning Retirement Assets | Toolkit #2
3 Common misconceptions and possible responses

The table below shows survey                               proportion of Fortune 1000 funds         as funds over USD $1 billion in
data for retirement plan sponsors                          that responded to the survey, of         plan assets were less likely to offer
in the United States regarding                             which only 4.8% offered a socially       such a fund, at 3.8%, compared
their inclusion of at least one                            responsible fund. In addition,           to 4.8% across all Fortune 1000
“socially responsible” (a term that                        while out of the broader cohort          plan sizes. There may be many
is undefined in the survey) fund                           of all industries, the larger plan       underlying reasons for these
in the plan lineup. Of particular                          sizes (those over USD $1 billion         trends, however the clear finding
note, the proportion of survey                             in plan assets) were more likely to      is that there is significant room for
respondents across all industries                          offer a socially responsible fund,       growth among large retirement
that offered such a fund is                                at 10.6%, the opposite was true          plans to offer additional socially
far greater, at 8.4% than the                              among Fortune 1000 companies,            responsible funds to participants.

Figure 3: DC plan investment offerings survey data

       PLANSPONSOR SURVEY DATA 28                                ALL INDUSTRIES (N=4000)                  FORTUNE 1000 (N=194)

                         Plan size                               Overall          >USD $1B              Overall           >USD $1B

          % of plans offering a socially
                                                                  8.4%              10.6%                4.8%                3.8%
               responsible fund29


          Pirelli Tire LLC is a US subsidiary of WBCSD member Pirelli & C, a global tire manufacturer. As a perennial
          sector sustainability leader recognized by leading global indexes and third-party organizations, Pirelli has
          committed to continually enhancing its environmental, social and governance performance.

          In 2015, Pirelli North America’s Public Affairs team began to recognize that offering an ESG option as part
          of the company’s defined contribution plan lineup could be an effective way to provide plan participants
          with enhanced retirement outcomes that reflect a longer term perspective on risks and opportunities.
          However, initial inquiries with the HR department, which were well-received, did not lead anywhere
          because the investment managers told HR representatives that there wasn’t an available “sustainability”
          option. Later, it became clear that there had been a “social responsibility” fund option available but that
          there was confusion between the terms “sustainability” and “social responsibility.”

          The HR representative reported in 2015 and 2016 that the Defined Contribution Investment Committee
          was nevertheless looking into the request and had discussed it at quarterly meetings.

          In the Fall of 2016, new committee members found that the committee, and its key service providers,
          were interested in the topic of ESG but not fully familiar with it, and a question was raised about whether
          there could be a trade-off between financial performance and ESG performance. The plan’s investment
          consultant agreed to do research, and returned to the committee with a complete report and comparative
          information on a passive sustainable equity strategy, as well as an ESG integrated active equity strategy.
          After considering fees and risks related to the relative concentration of the active equity strategy, the
          committee decided to add the passive sustainable equity strategy to the DC plan lineup in Q3 2017.

          At the beginning of 2018, assets in the sustainable fund were at a low level, yet grew by 170% over the
          course of the year as the fund saw significant new allocation and re-allocation from participants, revealing
          strong demand for this sustainability-oriented investment option.

     PlanSponsor; 2019 Defined Contribution Plan Survey.
     PlanSponsor does not define

                                                                                                 Aligning Retirement Assets | Toolkit #2 17

   Methods for
   a responsible
   retirement plan
   Presuming that retirement plan fiduciaries have decided
   to incorporate responsible investment approaches into
   the retirement plan, what are the next steps?

18 Aligning
18 Aligning Retirement
            Retirement Assets
                       Assets || Toolkit
                                 Toolkit #2
4 Methods for implementing a responsible retirement plan

The following are suggested steps                                have some interest or untapped                                and opportunities in relation
to take, based on successful                                     expertise in ESG topics, but                                  to various investment options.
engagements that the participants                                have not had the opportunity to                               Many consultants also offer
in this project have had in advising                             demonstrate that expertise.                                   ESG-related capabilities to clients
retirement plan fiduciaries on                                                                                                 through retainers or project-based
such matters. While these steps                                  Other retirement plans may                                    engagements.
are laid out in a deliberate order,                              discover that the investment
different plans will have different                              managers whose strategies                                     As retirement plans generally have
governance structures and/                                       they are invested in have ESG                                 existing relationships with at least
or third-party relationships,                                    capabilities and guidance to offer                            one of the resources noted above
which may render certain steps                                   plan fiduciaries. This is because                             – internal expert staff, investment
redundant. Nonetheless, we                                       many managers are rapidly                                     managers, and/or investment
believe that the steps outlined                                  developing their ESG expertise                                consultants – inquiring about those
below will be applicable to the                                  in response to market demand.                                 resources’ responsible investment
majority of retirement plans                                     While not strictly hired to perform                           experience, tools and capabilities
around the world.                                                such tasks, investment managers                               could be a worthwhile first step to
                                                                 can frequently provide insights                               take. If the resource offers some
                                                                 on ESG topics (or indeed, many                                capabilities to draw upon, then
                                                                 other topics) based on their                                  retirement plan staff could request
A. Assess existing ESG                                           experiences, although many                                    an educational session regarding
resources (as applicable)                                        retirement plan fiduciaries may not                           the current retirement plan
                                                                 be aware of such capabilities.                                portfolio (for DB plans) or lineup (for
Retirement plans often have                                                                                                    DC plans) and potential areas for
access to many different internal                                Finally, many other retirement                                ESG incorporation that fiduciaries
and external resources, some                                     plans engage a third-party                                    could consider.
of which may have ESG-related                                    consultant to aid in key elements
capabilities and expertise                                       of retirement plan activities, in                             If existing resources do not have
that fiduciaries may not have                                    particular, Investment Policy                                 robust responsible investment track
taken advantage of previously.                                   Statement (IPS) maintenance                                   records or resources, or appear
For example, retirement plans                                    and the investment selection and                              resistant to engage on the topic,
that have devoted significant                                    monitoring process. Consultants                               retirement plans can seek outside
resources to developing internal                                 are generally expected to be                                  advice – specific to responsible
staff investment capabilities may                                well-informed about investment                                investment topics or otherwise –
not employ third-party investment                                managers and their products, as                               from consulting firms for a fee, or
consultants30 to aid in investment                               well as their particular capabilities;                        issue RFPs/tenders to seek new
manager selection processes                                      as such, consultants are typically                            relationships with resources with
and other aspects of retirement                                  a key source of information                                   more advanced RI capabilities.31
plan governance. It’s possible that                              to investment committees,
certain retirement plan staff may                                helping them balance risks

Figure 4: Steps toward retirement plan ESG incorporation

                1                        2                         3                        4                        5                         6                        7

          Assess                   Assess                     Update                 Evaluate                 Evaluate                  Evaluate              Communicate
       existing ESG             plan trustees                  IPS                    current               potential new               portfolio              changes to
        resources               perspectives                                         managers                managers                 implications             participants

     While this paper refers to investment “consultants,” we recognize that the term investment “advisor” is frequently used synonymously, although typically in reference to retail
     investment relationships, rather than institutional investment relationships. As this paper is oriented toward institutions, we will use the term consultant.
     One possible source for assessing investment consultants’ ESG capabilities is the 2017 Independent Research in Responsible Investment Survey, which (as of this writ-
     ing) is being updated for 2019, and surveyed over 1,000 professionals working in responsible investment, corporate governance or other functions with insight into
     ESG practices from over 40 countries. The 2017 survey results can be found here:

                                                                                                                          Aligning Retirement Assets | Toolkit #2 19
4 Methods for implementing a responsible retirement plan

   B. Assess plan fiduciaries’               Following the education session,          Some example topics for
   perspectives on ESG risks                 a useful next step to engage              members to respond to include:
   and opportunities                         retirement plan fiduciaries is to
                                                                                       • Do fiduciaries believe that
                                             develop and issue a confidential
                                             survey regarding committee                  considering ESG factors in
   Retirement plan investment                                                            investment decision-making is
                                             members’ views on material
   committee members tend to be                                                          aligned with fiduciary duty?
                                             long-term ESG risks and
   selected to serve in a fiduciary
                                             opportunities that the plan should
   role because of the experience                                                      • Do fiduciaries believe that
                                             actively consider in investment
   or perspective they bring to the                                                      considering ESG information
                                             decisions. This survey could be
   committee, and many tend to have                                                      as part of the investment
                                             administered through an online
   relevant financial sector and/or                                                      process can help identify
                                             tool, or an in-person meeting,
   human resources experience.                                                           material financial issues and
                                             although the emphasis should be
                                                                                         can contribute to better risk
   Given individuals in such roles           placed on gathering the views of
                                                                                         adjusted returns?
   likely have varying exposure              individual fiduciaries in their roles
   to responsible investment                 governing the retirement plan, and        • Do fiduciaries believe that
   topics, and may bring particular          therefore should be confidential or         investment stewardship – or
   perspectives into such                    anonymous.                                  proxy voting and engagement
   discussions, it can be helpful to                                                     with investee companies
                                             If administering a survey is
   hold an educational session for                                                       – can enhanced corporate
                                             not feasible or is otherwise
   committee members to provide                                                          governance and long-term
                                             undesirable, engaging committee
   a common foundation to ensure                                                         financial performance?
                                             members in a discussion around
   consistency regarding ESG topics,
                                             long-term risks and opportunities,        • Do fiduciaries believe that
   definitions and implications in a
                                             and how such considerations                 reputational issues or long-
   retirement plan context.
                                             are considered in the retirement            term financial performance
   Investment advisors can typically         plan’s overall strategy (if at all) can     considerations connected to
   conduct such sessions during              result in useful guidance.                  certain investments present
   regularly scheduled committee                                                         material risks, and should
   meetings, presuming they                                                              therefore be considered for
   have sufficient background in                                                         exclusion from the investment
   responsible investments.                                                              portfolio? If so, what are those
                                                                                         industry sectors or topics?

                                                                                       The plan advisor and/or staff
                                                                                       should then aggregate all
                                                                                       responses and analyze them
                                                                                       for trends before presenting the
                                                                                       results to the committee.

                                                                                       If fiduciaries indicate in the
                                                                                       survey that the majority hold
                                                                                       views about the materiality of
                                                                                       ESG incorporation methods to
                                                                                       investment performance, then
                                                                                       considering how to integrate such
                                                                                       perspectives into the committee’s
                                                                                       investment strategy would be a
                                                                                       prudent next step.

20 Aligning Retirement Assets | Toolkit #2
4 Methods for implementing a responsible retirement plan

C. Update Investment                                            • What is your rationale for                                  A recent report estimated that
Policy Statement to                                               updating your policy? And                                   the global responsible investment
take ESG considerations                                           why now? Is it a best practice/                             market grew to exceed USD $30
into account                                                      regulatory requirement?                                     trillion in AUM in 2018, up from
                                                                                                                              USD $23 trillion in 2016.36 It’s clear
                                                                • What considerations must                                    the responsible investment market
Presuming that the steps above                                    your policy include to meet                                 is growing, dynamic and innovative
have been completed, formally                                     your organization’s investment                              across the world. In the face of
integrating the material ESG                                      strategy and objectives?33                                  this dynamism, many methods
considerations identified by
                                                                                                                              of analyzing the ESG quality of
committee members into the                                      Crafting responses to these
                                                                                                                              investment funds and issuers of
retirement plan’s Investment                                    questions, ideally with help
                                                                                                                              securities (primarily publicly traded
Policy Statement (IPS) will provide                             from an experienced advisor or
                                                                                                                              companies) are emerging.
a framework to inform future                                    consultant to guide the process,
investment analyses and both                                    can provide useful support to
asset allocation (for DB plans) and/                            the committee for drafting and                                i. Fund-Level ESG
or investment manager selection                                 adopting updates to the IPS that                              commitment and
processes (for DB and DC plans).                                reflect ESG considerations. These                             investment process
                                                                policy updates will, in turn, provide
The Principles for Responsible                                  specific guidance to investment                               In order to evaluate the best
Investment (PRI) published useful                               managers and advisors regarding                               course of action for aligning a
guidance to aid investment                                      where the retirement plan deems                               retirement plan with responsible
committees in considering                                       ESG factors to be material for                                investment, a prudent first
responsible investment in their                                 investment decision-making,                                   step for plan sponsors is to ask
investment policies, including the                              clarifying expectations.                                      investment consultants or other
following questions to consider                                                                                               resources about their capabilities
as part of the policy development                                                                                             for assessing investment
process:                                                                                                                      managers’ ESG approaches.
                                                                D. Evaluate current
                                                                                                                              Driven by growing client demand,
• Does your organization have                                   investment managers’                                          numerous investment consultants
  a comprehensive investment                                    responsible                                                   are enhancing their research and
  strategy which accounts for                                   investment efforts                                            capabilities around responsible
  long-term trends? PRI’s Crafting
                                                                                                                              investments, with ESG ratings of
  an Investment Strategy32                                      The responsible investment                                    investment strategies being one
  guidance on investment                                        industry is growing significantly in                          approach that is being increasingly
  strategy development highlights                               the range of products and services                            developed by consultancies.
  key aspects to consider.                                      that are available to investors.
                                                                Between 2015 and 2017, over                                    In 2008, Mercer developed an
• How does your organization
                                                                100 different sustainable open-                               integrated approach to rating
  view ESG factors? Are you
                                                                ended mutual and exchange-traded                              investment strategies for how
  conducting this review for
                                                                funds were launched in the United                             actively the strategy incorporates
  risk-management purposes, to
                                                                States,34 and in 2018, over 290                               ESG factors and active ownership
  unlock new opportunities, or is
                                                                sustainable funds were launched                               approaches into investment
  it a combination of both?
                                                                in Europe alone.35                                            decision-making, to accompany
                                                                                                                              the company’s existing traditional

     A complete guide to investment policy development can be found in UNPRI’s Investment Policy: Process & Practice document, available for download here: https://www.unpri.
     Principles for Responsible Investment (2016). “Getting started on an integrated investment policy.” Available at:
     Jon Hale (2018). Sustainable Funds U.S. Landscape Report. Morningstar. Available at:
     Funds_Landscape.pdf. Page 7.
     Hortense Bioy (2019). European Sustainable Funds: 2018 in Review. Morningstar. Available at:
     Axel Pierron (2019). “ESG Data: Mainstream Consumption, Bigger Spending.” Opimas. Available at:

                                                                                                                         Aligning Retirement Assets | Toolkit #2 21
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