Research shows that 401(k) plan participants who direct their investment, rarely allocate to environmental, social, and governance (ESG) investments.
The research, by PGIM and the Employee Benefit Research Institute, examined the allocation decisions of 9,324 defined contribution plan participants, across more than 100 participant-directed Defined Contribution plans, where there is at least one ESG fund available in the core menu.
The average allocation to ESG funds among the participants in the analysis was 1.7% of the total assets and or balances for invested participants. 8.9% of participants had some allocation to an ESG fund and the average allocation to ESG strategies among those investing in any ESG funds is 18.7% of their total balance, the research shows.
