Federal employees miss out on sustainable investment option

Every year millions of American workers contribute a portion of their paychecks to a retirement plan, and many of them can choose to direct their retirement dollars to be invested in companies with socially responsible businesses practices – also known as sustainable, responsible and impact investing (SRI).  This may not be a household term, but its effects can touch every aspect of our lives. SRI investments address a range of issues including climate change, fair pay, environmental risks, human rights, community development, and product safety – areas that many of our public servants dedicate their careers to tackling. But right now, there is an entire class of investors that does not have access to SRI funds: employees of the federal government. Adoption of legislation to correct this is long overdue. 

Good corporate practices are often an indicator of sound management, financial success, and long-term stability, which is why a wide range of institutional investors have turned to SRI options. According to the recently-released US SIF Foundation Report on US Sustainable, Responsible and Impact Investing Trends, SRI has experienced double-digit growth over the last two years. According to 2013 year-end estimates, SRI totaled $6.57 trillion, or more than one out of every six dollars under professional management in the United States. SRI assets are a significant part of the US financial market, allowing investors to pursue competitive financial returns with companies committed to responsible business practices. 

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With more and more investors using their hard-earned dollars to encourage business practices in line with their personal beliefs, it’s time to give federal employees the same option. Congress should pass legislation to allow federal employees to make SRI a full part of their retirement plans. The Federal Employees Responsible Investment Act, S. 1746 and H.R. 3563, which we introduced this past Congress, would direct the Federal Retirement Thrift Investment Board to select a "Corporate Responsibility Index" as an option for the retirement savings plan for federal employees – called the Thrift Savings Plan, or TSP.  Our bill would allow federal workers to direct their retirement dollars toward more sustainable and socially conscious investments. 

By providing an SRI option for federal employees, the federal government would be in the company of most of our states, scores of cities and counties, and numerous private companies.  And with more than 2.9 million employees contributing to the TSP, the federal workforce could send a powerful message about the value of corporate responsibility. 

The money we put towards our retirement helps shape the world in which we will live.  Decades from now, our oceans will have taken more land from our shores, temperatures will be hotter, and world population will have grown by billions. Actions we take today can improve the future of our planet. SRI can advance these efforts by empowering all those who choose to put their money where their heart is.  

Whitehouse is Rhode Island’s junior senator, serving since 2007. He sits on the Budget; the Environment and Public Works; and the Judiciary committees.  Langevin has represented Rhode Island’s 2nd Congressional District since 2001. He sits on the Armed Services and the Intelligence committees..