The Social Investment Forum (SIF) is putting its weight behind a bill that would guarantee federal employees have the option of investing in socially responsible funds in their Thrift Savings Plan.
The bill (HR 6183), introduced in the U.S. House of Representatives, would require at least one socially responsible investment fund to be included in federal employees' choices for retirement investing.
At least 17 states and many private employers already offer this option for retirement accounts. Many state laws requiring the option have been in place for years, but few states made the offer without legislation requiring it, says Peter DeSimone, SIF director of programs.
"Many people come to work for the federal government, in the Environmental Protection Agency or other departments, to work on a cause and they would like their investments to reflect those same goals," DeSimone says.
Arguments have been raised that socially responsible investing costs more to administer or that not many employees care about the option, but no real opposition to the bill has been raised, DeSimone says. SIF is working with members of Congress to inform them the criticisms are not true.
"This measure would give federal employees the range of investment options that many state and private sector employees already have access to by allowing investments in at least one socially responsible index fund" says Lisa Woll, CEO of SIF.
"Investors are increasingly turning to socially responsible and sustainable investment options because good corporate governance and performance on social and environmental issues are often indicators of financial success, good management and less risk," she adds.
The proposed legislation would require the Federal Retirement Thrift Investment Board to select a Corporate Responsibility Index as an option for Thrift Savings Plan investment purposes. The fund would include companies that meet strict financial criteria, in addition to having strong corporate governance, sustainable environmental policies, solid workplace relations, positive community involvement, safe products and respect for human rights.
The Thrift Savings Plan is open to members of uniformed services and civilians who work for the federal government. It has more than 4 million members with $244.4 billion in investment.
States that require this option include Alaska, California, Connecticut, Florida, Illinois, Indiana, Massachusetts, Montana, New York, Nevada, New Mexico, North Carolina, South Carolina, Tennessee, Vermont, Washington and Wisconsin. Rep. Jim Langevin (D-R.I.) is the original sponsor and co-sponsors are Reps. Patrick Kennedy (D-R.I.), Dennis Kucinich (D-Oh.), Nita Lowey (D-N.Y.) and James McGovern (D-Mass).