Washington, D.C. – U.S. Senator Sheldon Whitehouse (D-RI) and Congressman Jim Langevin (D-RI) introduced legislation in their respective chambers today that would allow federal employees to make socially responsible investments (SRI) in their retirement plans. The Federal Employees Sustainable Investment Act, which is also supported by Congressman David Cicilline (D-RI), would allow federal employees to direct retirement investments toward socially responsible corporations.
“Americans increasingly want to invest in companies whose policies align with their personal principles,” said Whitehouse. “This legislation will allow millions of federal employees and retirees to choose how their money is invested, providing them with the freedom to use the power of their individual purse to tell big polluters they can’t keep dumping carbon pollution into our atmosphere and oceans without consequences.”
“Good corporate citizenship is about more than just positive public relations. It’s about creating a sustainable business model that consumers can feel good about,” said Langevin, who has championed similar legislation in the House over the past five sessions of Congress. “Investors are increasingly turning to socially responsible investment options because good corporate practices are often an indicator of good management, financial success and long-term stability. This legislation empowers federal employees to invest in companies that maintain socially responsible and environmentally sustainable practices.”
Sustainability can positively affect a business’s operating performance and stock price. Firms with strong employee engagement may have higher employee motivation and lower turnover. Firms that reduce waste or utilize resources more efficiently may see increased profitability through cost savings. Many investors have already recognized the benefits of SRI and are acting accordingly. In 2014, $1 out of every $6 of US assets under professional management utilized sustainable investment criteria; a total of $6.57 trillion. The Federal Employees Sustainable Investment Act would provide federal employees the same option.
The legislation would direct the Federal Retirement Thrift Investment Board to select a “Corporate Responsibility Index” as an option for Thrift Savings Plan (TSP) contributions by federal employees. The TSP is a retirement savings and investment plan for federal employees and members of the uniformed services that offers similar benefits as 401(k) plans. The Corporate Responsibility Index would include a broad index of stocks of companies that maintain strong corporate governance, sustainable environmental policies and practices, solid workplace relations, positive community involvement, safe products and respect for human rights around the world.
Senator Mazie Hirono (D-HI) is an original cosponsor of the Senate bill. Original cosponsors for the House bill are Congressmen Earl Blumenauer (D-OR), Michael Capuano (D-MA), Gerald Connolly (D-VA), Paul Tonko (D-NY), David Cicilline (D-RI), Alan Lowenthal (D-CA) and Don Beyer (D-VA).
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