Published 1 year ago.
About a 4 minute read.
Campbell's — and many other companies’ — current 401(k) options have employees investing millions in fossil fuels and deforestation through Vanguard, which has just announced it has left the Net Zero Asset Managers initiative.
Last week, Campbell Soup Company shareholders voted on an As You
asking the company to prepare a report assessing how Campbell’s retirement funds
manage the growing systemic risk created by investing in companies contributing
significantly to climate change. The proposal earned an 8.8 percent
at Campbell’s annual general meeting, achieving the threshold needed to continue
dialog with the company and resubmit the resolution next year, if necessary.
While Campbell’s has embraced strong climate
— including a commitment to reduce its Scope 1 and 2 emissions by 42 percent by
2030, as well as commitments to reduce its deforestation impact — it continues to
invest more than $130
of employee retirement savings into fossil fuel companies and agribusinesses
involved in deforestation. As concern over the impact of high-carbon investments
gains momentum, companies such as Campbell’s must begin addressing their
401(k)s’ contributions to climate change or risk negative effects to their
reputations, 401(k) plan returns, employees’ futures, consumer retention and
“Employees want and need investment plans that reduce climate risk and impact,”
said As You Sow President Danielle
Fugere. “Now more than
ever, employees want to save for retirement while leveraging their investor
power to avoid climate destruction.”
While initiatives such as the Fossil Free Banking Alliance have emerged to help steer individual investors toward funds that more closely align with their values, employees tend to have less input into where their employers direct their retirement funds. Plus, many 401(k) plan fiduciaries have avoided taking climate risk into account in
their 401(k) plans for fear of breaching their fiduciary duty. However, the
Department of Labor last week
its long-awaited “Prudence and Loyalty"
that empowers plan fiduciaries to safeguard the savings of US workers by
clarifying that fiduciaries of employee retirement plans can consider material
environmental, social and governance (ESG) risks when making investment and
proxy voting decisions.
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As is the case with many other companies, a substantial amount of Campbell’s
401(k) plan assets are currently invested in the default Vanguard target-date
option — which has
exposure to carbon-intensive industries and companies responsible for
deforestation in the Amazon and Indonesian rainforests. These
high-carbon investments not only have the potential to risk short-term returns
but create significant risk for young employees' future retirements following
decades of climate impact. And just today, Vanguard — which has long felt heat
for lagging behind other asset managers in acknowledging the need to shift away
from fossil-fuel investments — announced it has quit the Net Zero Asset
essentially dropping any pretense of a commitment to climate action.
A 2019 CDP
indicated that 215 of the largest global companies report almost $1 trillion at
risk from climate impacts, with many losses to hit within the next five years.
Climate change also threatens workers’ life savings.
for climate-safe investment options, Campbell's does not currently offer any
such options inside its 401(k) plan — but its lack of climate-safe retirement options is not unique. Investors
have filed a similar shareholder
at Microsoft. While Microsoft is seen as an industry leader when it comes to
climate goals and climate
it, too, is investing more than $2
of employee savings into oil, coal-fired utilities and agribusinesses involved
in deforestation. Investors will vote on the Microsoft resolution at the
upcoming annual meeting on Dec. 13. As You Sow encourages Microsoft investors to
vote at the upcoming Microsoft meeting by following the simple steps outlined in
this shareholder voting
To learn more, read this press
As You Sow publishes monthly report cards rating mutual funds and retirement
plans as part of its Invest Your
Published Dec 7, 2022 1pm EST / 10am PST / 6pm GMT / 7pm CET