Aligning Retirement Assets

This project enables companies to better align retirement assets, including defined benefit and defined contribution plans, with their overall sustainability goals by integrating Environmental, Social and Governance (ESG) considerations.

Our goal is to encourage responsible retirement plan investments since thoughtfully considering ESG factors in investment processes can result in improved risk-adjusted returns for participants and beneficiaries over the longer term.

The challenge

Many companies have made significant commitments to sustainability. However, a “blind spot” often exists between a company’s values and its retirement investment strategy. The majority of Fortune 1000 companies have not aligned their corporate retirement plans with their sustainability commitments, despite the fact that recent studies show the majority of employees would like their companies to do so.

The business case

Through advancements in sustainable investing, initial data indicates it may be possible to create total portfolio solutions that enhance risk-adjusted returns in the long run without compromising short term return goals. This long-term outlook matches well with the long duration of retirement investments. Additionally, companies who have high ESG characteristics may also be more resilient through a downturn.

The solution

Top asset management and investment consulting firms - including Allianz Global Investors, BlackRock, Legal & General Investment Management, Mercer and Natixis– have joined the initiative’s steering committee to contribute best practices and innovative thinking on ESG, helping to educate member companies on incorporating sustainable strategies in their retirement plans.

The project is developing the toolkits to help understand: (1) What is sustainable retirement? (2) How to develop a sustainable retirement plan?

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