I wouldn’t put an ESG fund in a plan

The worst things to argue about are politics and religion. That’s why I avoid suggesting that plan sponsors add an ESG fund to their 401(k) lineup. I’ve never been a big fan of these funds because each mutual fund company might have a different interpretation that an ESG company might be worth investing in.

Most of all, I think plan sponsors should focus on investment options that can maximize return and I don’t believe that an ESG fund is about maximizing return. I drive a Prius, I recycle, and I try to add more plants to my diet, but as a plan fiduciary, that has nothing to do with trying to put plan participants in a better financial position for retirement savings.

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