PLANSPONSOR - April/May 2019 - 68

Acting on ESG Principles
INVESTMENT FOCUS
Fiduciaries need more to drive selections than a wish to change the world
I
nvesting to achieve environmental
and social goals gets numerous headlines
these days, with a particular
focus on fossil fuels, carbon footprints
and climate change. The practice goes
far back, however, to the founders of
the Methodist Church in the 18th century,
Quakers in the 19th, and the first
socially conscious mutual fund in 1928.
A generation ago, a socially responsible
investing (SRI) movement avoided certain
investments altogether, such as
companies selling tobacco or firearms,
or doing business in countries with deficient
human rights records.
SRI investment has evolved from
exclusion into investing with a more
holistic view of companies' environmental,
social and governance (ESG) behaviors.
But there are conflicts between investing
for social goals or sustainability and sponsors'
by-the-numbers fiduciary responsibilities
under the Employee Retirement
Income Security Act (ERISA). " In a retirement
plan context, wanting to change the
world is not a fiduciary consideration, "
says Alex Bernhardt, U.S. responsible
investment leader for Mercer Investments
in Seattle. " But adding an ESG plan option
because you think it's financially competitive
is a defensible decision. "
One of the knocks on ESG investing
has been that its choices lead to subpar
performance. That question has been
extensively studied, though, and many
researchers have concluded that sustainability
does not penalize portfolio results.
MSCI made a comparison, based on ESG
indexes it had compiled, of the value of a
hypothetical $100 invested for 10 years in
the broad U.S. market and in its selection
of ESG leaders, as well as in the world's
developed equity markets and in their
respective ESG leaders. In both cases,
performance of full markets vs. ESG portfolios
is virtually indistinguishable-for
68 PLANSPONSOR.com April - May 2019 Art by Nan Lee

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PLANSPONSOR - April/May 2019

Table of Contents for the Digital Edition of PLANSPONSOR - April/May 2019

2019 Plan Sponsor of the Year Winners and Honorees
2019 DB Administration Survey
2019 PLANSPONSOR Service Stars
Acting on ESG Principles
Pension Risk Transfers Increase
Out of Harm's Way
PLANSPONSOR - April/May 2019 - C1
PLANSPONSOR - April/May 2019 - FC1
PLANSPONSOR - April/May 2019 - FC2
PLANSPONSOR - April/May 2019 - C2
PLANSPONSOR - April/May 2019 - 1
PLANSPONSOR - April/May 2019 - 2
PLANSPONSOR - April/May 2019 - 3
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PLANSPONSOR - April/May 2019 - 2019 Plan Sponsor of the Year Winners and Honorees
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PLANSPONSOR - April/May 2019 - 47
PLANSPONSOR - April/May 2019 - 2019 DB Administration Survey
PLANSPONSOR - April/May 2019 - 49
PLANSPONSOR - April/May 2019 - 50
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PLANSPONSOR - April/May 2019 - 57
PLANSPONSOR - April/May 2019 - 2019 PLANSPONSOR Service Stars
PLANSPONSOR - April/May 2019 - 59
PLANSPONSOR - April/May 2019 - 60
PLANSPONSOR - April/May 2019 - 61
PLANSPONSOR - April/May 2019 - 62
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PLANSPONSOR - April/May 2019 - 66
PLANSPONSOR - April/May 2019 - 67
PLANSPONSOR - April/May 2019 - Acting on ESG Principles
PLANSPONSOR - April/May 2019 - 69
PLANSPONSOR - April/May 2019 - Pension Risk Transfers Increase
PLANSPONSOR - April/May 2019 - 71
PLANSPONSOR - April/May 2019 - Out of Harm's Way
PLANSPONSOR - April/May 2019 - 73
PLANSPONSOR - April/May 2019 - 74
PLANSPONSOR - April/May 2019 - 75
PLANSPONSOR - April/May 2019 - 76
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