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Fossil Fuel Free Retirement Plans

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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.


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.


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.

How do you define ‘fossil fuel free’?

The global divestment campaign calls for not investing in the top 200 fossil fuel companies by reserves. But, many times when an investor wants to avoid fossil fuel investments, they intend to eliminate all coal, oil, and gas companies, not just the top 200. Green Century defines fossil fuel free as:

  • No investments in any company that explores for, extracts, produces, or refines coal, oil or gas.
  • No investments in any utilities that produce or transmit electricity derived from coal, oil or gas.
  • No investments in any company with proven carbon reserves.

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.


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.

How to Organize Support

  1. Identify decision makers: Determine who else is involved in or has influence in the decision-making process. The HR Department, the Sustainability Director, and Investment Committee members are usually involved.
  2. Identify a champion: Your request will move more quickly if there is a leader in the administration who supports the idea. The more authority that a champion has, the more helpful this support will be.
  3. Understand the concerns: You do not need to be an investment expert, but it will be helpful for you to know the basics so that you can anticipate and answer these potential concerns:

Performance: There is a common misconception that fossil fuel free funds cause investors to “sacrifice” performance. There is a growing body of data and actual returns information that indicates that investors do not necessarily sacrifice performance by investing fossil fuel free and may in some cases outperform investments that include fossil fuels. Please refer to the Resources section below for more information.

Employee Interest: Employee plans can offer as few as six options, so decision-makers may not want to offer any that will not be used by many employees. Suggest conducting an employee survey. If the survey idea is not used, you can ask for a meeting with the decision-makers and bring a few supporters. To further demonstrate support from employees for a fossil fuel free option, you can also circulate a letter.

Fiduciary duty: Decision makers may think that offering fossil fuel free funds will violate their fiduciary duty. Refer them to updated ERISA (Employee Retirement Income Security Act of 1974) guidelines that clarify that consideration of environmental, social and governance factors in selecting retirement plan options is not incompatible with a plan’s fiduciary duties to its beneficiaries.


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


For additional resources, and more background on investing fossil fuel free, download Make a Clean Break, a guide to personal divestment and reinvestment from Green Century, and Trillium Asset Management, available here.

To research fossil fuel free investment strategies:

For information regarding consideration of environmental, social, and governance (ESG) criteria and fiduciary responsibility under the Employee Retirement Income Security Act of 1974 (ERISA), visit: or

For information on how to rollover a 401(k) from a past employer into a Green Century IRA, please visit our IRA information page.*

© 2018 Green Century Capital Management, Inc. 114 State Street, Suite 200, Boston, MA 02109. For More Information call: 1-800-93-GREEN (934-7336)

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 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.

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to risks including interest rate, credit, and inflation. The Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria.

The Green Century Funds are distributed by UMB Distribution Services, LLC., 235 W. Galena Street, Milwaukee, WI 53212.