401(k) Specialist Issue 3 - 2021 - 25

401(k) PRODUCTS
that ESG factors are an integral part of
sound investing, citing a significant growth
in social awareness among investors and because
ESG has become " more mainstream. "
Financial advisors feel similarly with nearly
60% expecting that in the next five years,
ESG investing will become standard practice
across the industry.
Anecdotally, interest in ESG is being seen
Some leading factors
driving investor interest
in ESG
daily by advisors. Ann Margaret Williams,
Shelton Capital Management's director of
retirement plan services says that in her
conversations with plan sponsors, ESG funds
come up " probably seven out of 10 " times.
" I just had a conversation with a prospective
client and ESG funds was his only
question regarding our investment lineup, "
she adds.
Do Millennials Deserve All the
ESG Credit?
Millennials are often credited with fueling
the ESG movement, but are they really
the main drivers?
Not so fast, says Green Alpha's Moszeter.
" Millennials are causing some companies
to focus on adding ESG vehicles to their
lineup but they haven't been the biggest
or only push, " observing that much of the
initial growth came from middle-aged,
college-educated women.
" The demographic group powered the
initial socially responsible investment (SRI)
growth, " but she believes that Millennials
are " following in their mom's footsteps " and
continuing the interest with ESG investing.
There is no doubt that Millennials have
certainly played a significant role in keeping
ESG at the forefront of the investing
conversation. The vast majority of high net
worth Millennials (87%) indicate that a
company's ESG track record is an important
consideration in their decision about
whether to invest in it or not, according to
a 2018 U.S. Trust Wealth and Worth report.
Legislation, DOL Could Provide
Additional Boost
A number of regulatory proposals are
entering the legislative process, and if they
pass, it could pave the way for advisors and
plan sponsors to embrace ESG funds even
more.
50%
Growing social
awareness among
investors
36%
Participate in a
green economy
6 10in
Two legislative bills are the initial attempts
to broaden the views around ESG
investing. The Financial Factors in Selecting
Retirement Plan Investments Act was
introduced in the U.S. Senate in 2020 and
according to US SIF, it makes clear that
ESG criteria may be considered in ERI42%
Become
more
" mainstream "
27%
Climate change
fund selectors are
adding ESG options due
to investor demand.
SA-governed retirement plans and will end
the " policy pendulum " of regulatory interpretations
on this issue at the Department
of Labor (DOL).
The legislation also clarifies that ESG criteria
may be considered in qualified default
investment alternatives (QDIA). US SIF
ISSUE 3 2021 | 401kSpecialist.com
25

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401(k) Specialist Issue 3 - 2021

Table of Contents for the Digital Edition of 401(k) Specialist Issue 3 - 2021

Table of Contents
401(k) Specialist Issue 3 - 2021 - Cover1
401(k) Specialist Issue 3 - 2021 - Table of Contents
401(k) Specialist Issue 3 - 2021 - 1
401(k) Specialist Issue 3 - 2021 - 2
401(k) Specialist Issue 3 - 2021 - 3
401(k) Specialist Issue 3 - 2021 - 4
401(k) Specialist Issue 3 - 2021 - 5
401(k) Specialist Issue 3 - 2021 - 6
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401(k) Specialist Issue 3 - 2021 - 8
401(k) Specialist Issue 3 - 2021 - 9
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401(k) Specialist Issue 3 - 2021 - 44
401(k) Specialist Issue 3 - 2021 - Cover3
401(k) Specialist Issue 3 - 2021 - Cover4
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