Policy: Access to Sustainable Investing
Sustainable investing in the United States continues to expand at a healthy pace. The total US-domiciled assets under management using sustainable investing strategies grew from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020, an increase of 42 percent. This represents 33 percent, or one in three dollars, of the $51.4 trillion in total US assets under professional management.
US SIF advocates for public policy that does not restrict investors' and investment professionals' ability to incorporate environmental, social, and governance (ESG) related tools. These metrics and analyses are used to evaluate an investment's risk or return or choose among otherwise equivalent investments.
Priority Areas of Action
ERISA & Fiduciary Duty: US SIF supports the 2021 Employment Retirement Income Security Act (ERISA) proposed rule clarifying that fiduciaries of ERISA-governed pension plans may consider ESG criteria in investments. Importantly, the proposal removes the prohibition on ESG considerations in qualified default investment alternatives, or QDIA, which will better serve plan participants.
In 2020, the DOL issued a new ERISA rule that restricts "non-pecuniary" criteria for investments in retirement plans. The rule's lack of clarity may dissuade fiduciaries from offering ESG options. The rule also makes it difficult to include ESG considerations in qualified default investment alternatives, or QDIAs.
Federal Thrift Savings Plan (TSP): The Federal Thrift Savings Plan (TSP) is the nation's largest retirement plan, managing $760 billion in assets for more than 6.3 million federal employees and retirees, including military personnel.
Federal employees should have access to the same kind of sustainable investment options offered to millions of public and private sector employees. In July 2015, the Thrift Savings Plan Investment Board unanimously decided to move forward with developing a mutual fund window with a sustainable option. In June 2021, the TSP announced that it would open a mutual fund window with sustainable options in the summer of 2022.
Community Development Financial Institutions (CDFI) Fund: Community Development Financial Institutions (CDFIs) play a critical role in creating a more inclusive economy by providing fair and transparent financing, as well as financial education, to people and communities underserved by mainstream financial institutions. CDFIs are dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream. Nearly 1,200 certified CDFIs are at work in all 50 states, the District of Columbia, Guam and Puerto Rico and can be found in rural and urban areas and indigenous communities. CDFIs are essential in combatting socioeconomic and racial inequality and have served as financial first responders during the COVID-19 pandemic. Recognizing the important role community finance plays in recovery, Congress included historic funding for CDFIs in the FY2021 Omnibus Appropriations and COVID-19 relief bill, and Biden's Build Back Better Bill includes record-breaking funding for CDFI priorities.
Letters and Statements
US SIF comment letter to DOL on ESG and proxy voting rulemaking (12/2021)
Joint Report on DOL ESG Rule Comments (8/2020)
US SIF comment letter to DOL on ERISA and ESG (7/2020)
US SIF letter requesting comment period extension for ERISA – ESG rulemaking (6/2020)
US SIF Summary of GAO Report on ESG and Retirement Plans 08/2018 and GAO Report
US SIF Comment Letter on Annual Reporting for Employee Benefit Plans (Form 5500) 12/2016
US SIF Commends Department Of Labor Repeal Of 2008 Bulletin Discouraging Fiduciaries From Incorporating Social And Environmental Investment Factors 10/2015
US SIF: The Forum for Sustainable and Responsible Investment Praises Decision To Provide Greater Investment Choice To Federal Employees 07/2015