How Do I Incorporate Sustainable Investing Options Within My Microsoft 401(k)?
Lars Phillips | August 4, 2020
Sustainable Investing, also known as Socially Responsible Investing (SRI), means incorporating Environmental, Social, and Governance (ESG) criteria into the investment selection process. Essentially, it allows you, as a Microsoft employee, to invest in a way that aligns with your values without necessarily compromising diversification or returns.
Let’s break down ESG a little more and go into more detail about what these categories mean.
- Environmental: Conservation and protecting the environment (air emissions, energy use, natural resources, etc.)
- Social: Relationships with employees, suppliers, clients, and communities. (labor standards, equal employment opportunities, health care, local community impact, etc.)
- Governance: Standards for company leadership, risk controls, and shareholder rights (ethical business practices, gender diversity, employment equality, equal wages, etc.)
While there are currently no sustainable fund options within your standard Microsoft 401(k), you can access hundreds of SRI mutual funds and ETFs through BrokerageLink. These options allow you to create a sustainable diversified portfolio within your Microsoft 401(k).
(if you are not familiar with BrokerageLink, we produced a video that provides more details on what is and its benefits.)
Some investors believe ESG investing means sacrificing returns. Recent research suggests ESG investing can lead to comparable returns—with some studies suggesting companies that pay attention to ESG factors can even outperform in the long run.
If you have questions and want to explore ESG investing within your Microsoft 401(k), please schedule some time with one of our Advisors to talk about your unique needs. We look forward to meeting you. Schedule a time here.