ESG options in 401(k)s could boost contributions, Schroders finds

ESG options in 401(k)s could boost contributions, Schroders finds
Ninety percent of plan participants who are aware of ESG choices said they invest in them.
MAY 13, 2021

A survey of defined-contribution plan participants by Schroders found that 40% didn't know whether their employer's plan offered environmental, social and governance investment options.

But 69% of the members of that group, along with those who said their DC plan did not offer ESG investment options, said they would or might increase their overall contribution rate if offered ESG options. Only 31% said they would not.

The survey found that among participants who were aware of their ESG options, 9 out of 10 said they invest in them.

“Offering plan participants ESG investment options — and providing greater plan communications about them — would not only appeal to purpose-minded investors, but also could help to motivate some participants to save more toward their retirement,” said Deb Boyden, the head of Schroders' US defined contribution group.

US SIF CEO Woll on challenges of adding ESG to 401(k)s

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