PLANSPONSOR - August/September 2018 - 56

PLAN PROFILE
ESG Diversification
T
he practice of investing in companies
that meet environmental,
social and governance (ESG) criteria
in their operations is slowly growing
in popularity. While this is most apparent
in the nonprofit space, corporations
are beginning to embrace it as well.
At designer and apparel retailer
EILEEN FISHER, the investment
committee for the 401(k) plan wanted
to increase the plan's exposure to ESG
fundamentals in its investment lineup.
The plan already had four ESG funds
on its menu, yet the company was interested
in evaluating those funds and
perhaps adding others. The committee
members realized that they needed
guidance.
A year ago spring, Pamela Yip,
director of benefits and human resource
(HR) operations, embarked on a search
for an adviser with experience in, among
other things, the ESG investing space.
Pamela Yip, director of benefits and
HR operations, EILEEN FISHER
" Every experience at EILEEN FISHER communicates the
company values, and that's very apparent in our benefits offerings
to our employees, " Yip says. " Increasing the amount of
socially responsible investment [SRI] options in the 401(k)
reflects those values. We wanted someone to offer us more guidance
and to take a deeper dive into ESG investing. "
Six firms were invited to submit proposals, through
InHub, an online request for proposals (RFP) management
technology company. The firms included the incumbent, a
few from InHub's adviser platform, and several that the plan
committee had identified through B Lab, an organization that
certified EILEEN FISHER as one its global community of forprofit
companies that meet standards of verified, overall social
and environmental performance.
The RFPs were issued that July 12 and were due back
shortly after, on August 4-a timeline agreed upon by Yip and
SNAPSHOT
PLAN SPONSOR
EILEEN FISHER
KEY PLAYER
Pamela Yip,
director of benefits
and HR operations
PARTICIPATION
RATE
96%
A plan sponsor conducts an online RFP to help meet its mission
InHub. Yip says, " The platform allowed
committee members to review the
proposals using a shared, centralized
document with side-by-side comparisons;
that enabled reviewers to make
notes, and I was able to flag points I had
additional questions about. "
Based on the review, three firms
were invited to participate in finalist
presentations later in the month, after
which EILEEN FISHER hired Fiduciary
Investment Advisors (FIA) of Windsor,
Connecticut.
FIA brought to the table in-depth
research on the ESG approach used for
each fund the design firm was considering
-i.e., negative screening, proactive
investment and qualitative assessment,
Yip says. " There are a whole host
of funds that are considered socially
responsible, but the definition is broad,
and just because a fund is considered
socially responsible doesn't mean it's
aligned with our company values. "
With FIA's help reviewing the screening criteria, EILEEN
FISHER replaced three of the four ESG funds in its plan.
The plan now includes the TIAA-CREF Social Choice Bond,
Vanguard FTSE [Financial Times Stock Exchange] Social Index
Fund, Walden Small Cap and DFA US Sustainability Core 1.
" We needed to get a deeper understanding of the underlying
investments and what the funds stand for, " she says. " For
instance, some ESG funds just exclude certain things such as
guns; then there are some that are more proactive. FIA helped us
navigate all that and also, from a fiduciary lens, evaluate if they
were still the best funds-both as ESG funds and from a performance
perspective. "
" In addition, with FIA we are able to engage our social
consciousness team in this process, " she notes.
-Judy Faust Hartnett
AVERAGE
DEFERRAL RATE
8%
PARTICIPANTS
1,153
TOTAL ASSETS
$82 million
56 PLANSPONSOR.com August-September 2018
Art by Chris Buzelli
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