Helping individuals advocate for more responsible investment options.
αlign is a community of impact-oriented professionals dedicated to using the power of their corporate network to invest in a better world. We work with individual employees to champion responsible investing options in their company's private pension offerings. This means providing at least one option where employees can put a portion of their retirement savings into a financial product that takes a company's broader impact into account: this might mean purposely avoiding investing in companies that have a large carbon footprint, that lack gender or racial diversity, or that repeatedly encounter human rights violations.
There is currently $9 Trillion under management in private retirement funds - that's the 401ks of individuals that work at companies. Very little of it is invested in products that explicitly consider corporate responsibility.
According to a study conducted by Morgan Stanley,75% of individual investors were interested in responsible investing in some capacity.
In the same study, 90% of millennials were interested in pursuing responsible investing strategies as part of their 401(k) portfolios.
What is Responsible Investing and When did it start?
Responsible investing refers to the practice of considering environmental, social, and governance (ESG) aspects of your investments. This can take the form of avoiding investing in things that don't align to your values, or proactively investing in things that do align to your values. This practice is nothing new: the first known example of responsible investing dates back to mid-1700s when the Quakers prohibited their members from investing in ships involved in the slave-trade.
How does Responsible Investing Affect My Returns?
When compared to market benchmarks, leading responsible investing products exhibit no statistical difference in returns or risk. In fact, research shows that in some cases, having an eye towards responsibility can actually help financial performance, particularly when it comes to have strong governance and ethical employment standards. Funds also publish their historical performance over time, so as an investor you can even check for yourself!
What Are Some examples of REsponsible Investing Products?
Today, there are a plethora of responsible investing products on the market. Many of them are structured similar to the Mutual Funds or Exchange Traded Funds (ETFs) that typically make up 401(k) investment options. Typically, they are groups of companies that have been rated by some set of environmental, social, and governance criteria. Today, more than one out of every five dollars under professional management in the United States has some responsible investment component, and there are over 400 responsible investing mutual funds available to investors.
Why Focus on My Retirement PLan?
There is over $9 Trillion invested in private pension funds across the US - that is, the sum of the retirement funds of all employees at private companies all across the US. That's about the GDP of India. By advocating for responsible investing options at your company, you can be a part of moving a really, really, big needle. Plus, over the past decade, public pensions (think teachers, government workers) have started to move towards having a responsible investing lens, but private pensions are late to the game.
Why Should my Company Care?
Companies can often add off-the-shelf responsible investing products at zero cost to the company. In fact, adding these options can have positive effects to the business including (1) improving company brand (2) improving employee satisfaction with benefits and (3) providing a differentiator in recruiting new employees. Today, many companies, from Patagonia to Bank of America have already started to see the business case for responsible retirement investments, and offer these options to their employees.
How Can I make an Impact?
According to research by Morgan Stanley 75% of individual investors in the US are interested in responsible investing, and 90% of millennial want these products in their 401k options. Yet companies have been slow to change the status-quo because they haven't heard demand directly. By organizing and educating your colleagues, you can help surface demand that already exists. You'll not only be mobilizing your own capital, but giving others the chance to do the same.