For many people, investing through an employer sponsored retirement plan like a 401(k) or 403(b) is an important piece of their plan to save for the future. Unfortunately, many of these plans do not yet offer a fossil fuel free option. For investors who want to invest fossil fuel free, the following steps can help you work with your employer to include fossil fuel free investment options in your plan.
STEP 1: FIND OUT WHAT IS ALREADY OFFERED
Begin by researching the holdings within each investment option in the retirement plan online. Look for a list of companies or at least the sector allocations. Note that “energy sector” and “utility sector” holdings roughly translate to “fossil fuel companies.” For mutual funds, look at each fund’s Annual or Semi-Annual Report. If you need help, work with the department that would have the best insight into the details of the retirement plan options, usually the Human Resources (HR) or Finance Department.
STEP 2: IDENTIFY FOSSIL FUEL FREE OPTIONS
Look for options that meet your definition of fossil fuel free
If your retirement plan offers mutual funds you can use a free online tool, Fossil Free Funds™, to identify funds that meet your fossil fuel free definition. Note that “low carbon” does not necessarily equal “fossil fuel free.” Check the prospectus, a legal document that provides details about a fund’s objectives, investment strategies, risks, and performance, as well as other details, for a fund’s definition of “fossil fuel free.” Without a clear statement addressing what fossil fuel free means, reference to “fossil fuel free” may simply be a marketing tactic to engage the growing pool of investors interested in fossil fuel free investing.
Some, but not all, fossil fuel free mutual funds also offer options that avoid other dangerous industries, such as tobacco or firearms. If you care about excluding those industries as well, or think that decision-makers will, look at the website or prospectus for this additional information.
STEP 3: WHO TO TALK TO ABOUT ADDING FOSSIL FUEL FREE INVESTMENT OPTIONS
Go back to the department or employee that first gave you information about the retirement plan offerings and ask them about the process to propose a new option for consideration. With a larger institution, it is likely that an investment committee plays a key role and that it uses outside consultants or financial advisors to help manage the current investments and evaluate any potential new offerings.
STEP 4: PRESENT FUNDS AND ETFS FOR CONSIDERATION
It may be easier for the organization or company to move forward if it has a specific request, such as one or two fossil fuel free funds. Or, if your retirement plan uses separately managed accounts, present your fossil fuel free definition preference and ask that the investment committee obtain information on what options can be made available.
Provide materials about the fossil fuel free funds you are proposing. If you are proposing the Green Century Funds, we recommend providing Green Century’s MSCI International Index Fund, Balanced Fund, and Equity Fund Briefs as well as the Green Century Funds’ Prospectus.
For more information or to request Green Century Funds materials, please call 1-800-934-7336 or email email@example.com.
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You should carefully consider the Funds’ investment objectives, risks, charges and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds, please click here for more information, email firstname.lastname@example.org or call 1-800-93-GREEN. Please read the Prospectus carefully before investing.
*Prior to transferring or rolling over your account, consider your other options. You may be able to leave money in your current plan, withdraw cash or rollover the assets to a new employer’s plan if one is available and rollovers are permitted. Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment. You should consult your own legal and tax professionals regarding your situation.
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