Why Do Apple, Disney, Visa, Facebook, and Microsoft Employees Invest Their Retirement Savings in Fossil Fuels and Prisons?
New scorecards show seven S&P500 giants’ 401(k) plans out of alignment with stated environmental and social goals.
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Stefanie Spear, [email protected], 216-387-1609
BERKELEY, CA—OCT. 21, 2021—Today, As You Sow, a non-profit corporate accountability organization, increased the coverage of its Corporate Retirement Plan Sustainability Scorecard to include five additional major U.S. publicly traded companies. In these retirement plans, employee savings are invested in mutual funds which directly contradict each company’s stated sustainability goals on climate change, deforestation, prisons, and other environmental and social issues.
Now, Apple, Facebook, Microsoft, The Walt Disney Company, and Visa join Amazon and Comcast in having their retirement plan investments rated on seven environmental and social sustainability issues. Using the most recent data available, together these companies are investing more than $3.6 billion in fossil fuels and more than $277 million in agribusiness contributing to the destruction of the Amazon and Indonesian rainforests.
“Apple is a leader in addressing climate risk by becoming carbon neutral across their worldwide operations,” said Andrew Behar, CEO of As You Sow. “Given that they are asking for uniform regulations to require corporations to disclose their emissions, it seems very strange that hundreds of millions of dollars of Apple employees’ hard-earned savings are invested in fossil fuel companies that are fueling climate change.”
More than 100 million people are invested in retirement plans in the U.S. with assets exceeding $10 trillion, with much of it in funds managed by major asset managers like Vanguard, BlackRock, and Fidelity. As You Sow has built a suite of Invest Your Values tools that show investors precisely what they own. Many funds are invested in extraction and risk.
A significant amount of the climate-risky investments were found via the plan default options, target-date funds from Vanguard and BlackRock. For Amazon, Comcast, and Facebook the default fund lineup held more than 50% of the plan assets. The Vanguard Target Retirement Funds and BlackRock LifePath Index Funds also have significant investments in weapon companies and companies profiting from prisons and mass incarceration.
“We have done a deep-dive on these retirement plan report cards to help employees and executives have an honest discussion about aligning investing with company and personal values, to create a holistic culture,” Behar said. “I'll bet that Microsoft and Visa did not set out to invest their retirement plan in companies that oppose their stance on climate change and deforestation. I’m sure that Facebook and Disney are not intentionally seeking to have their employees profit from private prisons.”
A recent Department of Labor statement reaffirmed that environmental and social criteria can be used when considering funds for retirement plans, including the default investment funds.
These scorecards will be followed by additional companies from the S&P 500. Previous research has found that few retirement plans offer sustainable investment options that avoid risky sectors like big oil, coal-fired utilities, weapons of mass destruction, prisons, and companies that score poorly on gender equality.
Most employees across the U.S. are unaware their retirement plan investments are profiting from environmentally and socially risky companies. The financial risks include stranded assets, reputational risk, and other negative impacts of unsustainable business practices that can destroy shareholder value. The Corporate Retirement Plan Sustainability Scorecard gives employees the tools and transparency needed to demand their employer address these risks.
As You Sow has used its expertise in mutual fund sustainability analysis and extensive database of ESG-screened companies to analyze corporations’ retirement plan investment options. Retirement plans are graded on seven environmental and social issues: fossil fuels, deforestation, gender equality, civilian firearms, prisons, military weapons, and tobacco. The tool includes a breakdown of how each investment option is rated.
Two solutions are offered to address the risk of unsustainable investments — first, companies should work towards making the default investment option a sustainable fund, and second, companies should make sure sustainable investment options are at least offered in the retirement plan.
“It’s time to create coherent corporate cultures that look at retirement plans the same way they look at operations,” said Behar. “Together, we can make the decision to stop profiting from investments that contribute to climate change and other environmental and social risks. The retirement plan scorecard is giving employees the tools to make this a reality.”
The Retirement Plan Sustainability Scorecard is As You Sow’s eighth Invest Your Values online educational tool, joining Fossil Free Funds, Deforestation Free Funds, Gender Equality Funds, Gun Free Funds, Prison Free Funds, Weapon Free Funds, and Tobacco Free Funds.
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As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. Learn more about us here.