Is your retirement account invested sustainably? As a consumer who prioritizes sustainability, chances are you make daily choices to help the environment, like cutting down on your water use and buying eco-friendly products. But have you considered how your savings can make a difference, too? That’s right: your money can impact the environment, even when it’s not in use. If you want to learn how to ensure your retirement fund is both safe and sustainable, EGÉA SRI can help.
How to Ensure Your Retirement Funds are Both Safe and Sustainable
Many individuals simply create a retirement account and then don’t pay it much thought. But if you are mindful of the environment, it’s worth going back to take a look and see what your 401(k) or other account is actually invested in. You might not know it, but your 401(k) might be invested in companies that are contributing to global harm — companies that you wouldn’t consider investing your hard-earned money in. Instead, you can create a sustainable 401(k) and invest in brands that are actively working to combat climate change. More and more pension funds are moving forward with ESG investing, and you can too.
Why It Is Important to Ensure Your Retirement Accounts are Both Safe and Sustainable
Taking a look at the safety and sustainability of your retirement accounts isn’t just good for the environment. It can also be good for your future retired self’s wallet. It can actually be better for the health of your account to invest sustainably. The energy sector has performed poorly over the last decade as ESG investing is on the rise, and the new Biden administration is prioritizing its commitments to a clean energy revolution and environmental justice. A sustainable retirement fund can perform as well or better than traditional retirement funds.
How Do I Go About Creating a Safe and Sustainable Retirement Investing Strategy?
These are a few ways you can craft your sustainable retirement investing strategy:
Make Your 401(k) Sustainable
One way to ensure your retirement fund is both safe and sustainable is by making your 401(k) sustainable. If you are unsure how to start investing sustainably, a firm known for sustainable investing like EGÉA SRI can help.
Choose a Sustainable Roth IRA
A sustainable Roth IRA is an investment strategy that seeks to maximize financial returns, while also supporting an idea, belief, or cause that is important to the individual investor.
How to Build a Sustainable Retirement Portfolio
These are the steps for how to ensure your retirement fund is both safe and sustainable:
Find Out Where Your Money is Going
There are many retirement account options available. It is most likely that your retirement fund is either an employer-sponsored retirement account like a 401(k) or a 403(b). Or, you might have an individual savings account, like an IRA to Roth IRA. Or, if you are self-employed, you might have a solo 401(k). For employer-sponsored accounts, investment options are usually either mutual funds or equity shares. Your employer sets the limits and details of your plan, including which types of funds you can invest in. However, if you have an individual retirement account (often referred to as an IRA), you have much more choice in what you invest in. No matter which type of retirement account you have, you should be able to find out where your money is going and track its environmental impact.
Learn About Your Retirement Fund Options
Even if you do have an employee-sponsored fund like a 401(k), you still have options. Once you determine how much you are going to contribute to your fund, your employer or the financial institution that manages your account should give you a range of stocks and bond funds to choose from. If you want to learn more about your options, contact your company’s 401(k) advisor or HR department. Specifically, you can ask if they offer options like ESG funds. ESG is an acronym that stands for environmental, social, and governance factors.
Choose Objectives That Align with Your Morals and Values
As an investor, you have the power to choose investments (including for your retirement fund) that align with your values. Determine your objectives as an investor and use them to either have a conversation with your employer’s retirement plan or to create a personal retirement investment plan. One way to make your retirement fund more intentional is to choose to either positively screen or negatively screen your investments. A positive screen includes funds that align with your values. For example, you might want to invest in clean water initiatives or alternative energy sources. A negative screen excludes companies that do not align with your values or meet ESG standards.
Do Your Research
Once you know what your retirement fund options offers are and what your goals are for your investments, it’s time to make decisions.
Check-In Frequently
Don’t just set your retirement fund and forget it. Be sure to check in on your fund and your investments and adjust accordingly.
How to Determine the Best Green Companies to Invest In
When you are ensuring your retirement fund is sustainable, it’s important to avoid companies that are greenwashing. Greenwashing is when companies purport to be green, when their practices might not in fact be all that sustainable. The best way to find the best green companies to invest in is to ensure that they focus on reusing or renewing, encourage fair trade and safety, and take care of the environment. An experienced sustainable investing firm like EGÉA SRI knows how to spot greenwashing and find the best green companies to invest in that align with your own personal values. The best green company for you to invest in might differ from another investor’s.
Ensure Your Retirement Fund is Both Safe and Sustainable with EGÉA SRI
If you want to ensure your retirement fund is both safe and sustainable, it’s time to open a retirement fund with us at EGÉA SRI. We create and manage sustainable ESG portfolios, including for your retirement. Contact us today to start your own safe and sustainable retirement fund for your future and the planet.
Disclosure:
Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria exclude securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
