The World Business Council for Sustainable Development (WBCSD) released its second Aligning Retirement Assets Toolkit – designed to help companies better align retirement funds with their social and environmental commitments.
This work is the outcome of Aligning Retirement Assets, a WBCSD initiative that enables companies to better align retirement assets, including defined benefit and defined contribution plans, with their overall sustainability goals.
Under the Aligning Retirement Assets project, WBCSD set an aspirational goal to help move 1% (USD $10 billion) of WBCSD member companies’ total retirement assets (estimated at USD $1 trillion) to ESG-themed funds by 2020. Top investment management industry players – including Allianz Global Investors, BlackRock, Legal & General Investment Management, Mercer, Natixis Investment Managers and the United Nations-supported Principles for Responsible Investment – lead the initiative’s steering committee. Mercer provided consulting services to WBCSD in connection with the initiative and development of the toolkit.
The release of this toolkit is timely in that a growing number of companies are grappling with how to integrate responsible investment approaches into the retirement plans they offer. However, developing and implementing an effective and responsible retirement plan requires both dedication and a careful, thoughtful approach. This toolkit builds on the toolkit released last year designed to help senior executives better understand how retirement plans are governed and operated. It also provided guidance on fiduciary responsibility.
“Companies who provide these types of funds in their retirement programs will gain a competitive advantage to attract and retain top talent,” said Bill Sisson, North American Executive Director for the WBCSD. “Increasingly, employees want these types of funds to invest in through their retirement program,” Sisson added.
“Mercer has advised retirement plans on responsible investment issues for many years, helping them to navigate related complexities. We have been very pleased to contribute to the Aligning Retirement Assets initiative, and we applaud the WBCSD, the ARA Steering Committee members and participating WBCSD member companies for collaborating to develop and publish these essential and practical Toolkits,” said Alex Bernhardt, US Responsible Investment Leader at Mercer.
Here’s what other members of the Aligning Retirement Assets steering committee are saying:
Irshaad Ahmad, Head of Institutional Business Europe at Allianz Global Investors, said “The key objective of the ARA initiative is to increase the number of companies that have an alignment of their corporate sustainability goals with the investment policies of their retirement plans. The launch of this second toolkit is a great step toward achieving that objective. We are very glad to be working on this important effort with the WBCSD and our industry colleagues.”
“The time horizon of retirement assets has not been well-integrated into investment options. We applaud the work of WBCSD in creating practical toolkits to help benefits executives address sustainability risks,” said John Hoeppner, Head of U.S. Stewardship and Sustainable Investments at Legal & General Investment Management America.
“At Natixis, we have increasingly seen that businesses are realizing the competitive advantage of adopting strong ESG policies. Naturally, they have extended this thinking into the investment options offered in their employee retirement savings plans,” said Ed Farrington, Executive Vice President of Retirement Strategies, Natixis Investment Managers. “This toolkit represents a significant step in helping plan sponsors add sustainable investing options to their benefit plans, and it provides insight on regulation and how ESG mandates adhere to the responsibility of a fiduciary.”
PRI CEO Fiona Reynolds said: “In giving companies tools to align retirement funds with their sustainable investing goals, WBCSD is also empowering beneficiaries who are increasingly looking for sustainable investment options. In planning for retirement it’s important for many that they can align profit, people and planet. As an Associate Collaboration Partner, PRI supports this initiative which helps incorporate ESG into the very significant capital represented by retirement funds.”
Alexander Cave, Co-Head of UK Defined Contribution for BlackRock: “Individuals increasingly recognize that they can now align their investments with their sustainability beliefs, and for many their retirement account is their most important investment. As plan sponsors think about how to navigate a broad and sometimes confusing range of investment options it’s clear they need help on how to incorporate sustainability into their retirement plans. This second toolkit gives real actionable insight on everything from regulation to investment and so we are excited to partner with WBCSD and help employers offer sustainable investing options.”