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Investing in Your Values – 401Ks and Beyond

Small- to medium-enterprises (SMEs) are essential for delivering more inclusive globalization and economic growth. They represent over 90% of the business population, provide over 60% of employment, and make up 55% of GDP in developed economies. SMEs have been recognized as an important economic catalyst by contributing towards financial growth, creating jobs, reducing global poverty, and expediting national development by generating income and national wealth. A significant portion of this economic growth can be achieved through the investments they financially support and offer to their employee stakeholders.  

By leaning on subject matter experts like As You Sow, Creative Money, and Green Retirement, Inc, Tradewater has consolidated a list of actions to ensure that both SMEs and individuals are not inadvertently funding the climate crisis, and instead investing in purposeful funds with low financial risk.  

Identify investments that are bad for your money and the planet 

No matter the rumors you may have heard, sustainable investments are good for the financially savvy and do not represent a sacrifice on returns. When you dive into the details of the top funds, you will unfortunately discover that they are often fueling (no pun intended) the climate crisis, inequality, global violence, gender disparity, and private prisons profiting from mass incarceration.  

As Flannery O’Connor so eloquently stated, “The truth does not change according to our ability to stomach it.”  

So, what are we going to do about it?  

Know where your dollars go 

Climate risk is business risk, and if your entire investment portfolio is built on unsustainable markets, then your dollars are at risk. If you need the proof, look up some of the retirement plans that large companies are funding or look up the investment funds that continue to fund the climate crisis. You may be surprised how much money is going towards deeply harmful environmental and social actions.  

I think the more people that know this information the better off we will be personally and financially.” – Katie Noble at Creative Money 

Apply educated action to your financial portfolio 

See what sustainable and purposeful options you can add to your retirement plan offerings. Check out Fossil Free Funds to view some of the highest rated funds based on performance and sustainability. These funds are rated based on their investments in fossil fuels, deforestation, gender equality, civilian firearms, profitable and private prisons, military weapons, and tobacco. You can click into each fund and each rating to determine why they received an A or below in a specific category and make your determinations on how to move forward based on what you discover.  

“The US retirement plan market is $37.8 trillion as of 12/31/22. For many people, the retirement plan may be their largest asset. Shifting retirement plan assets from fossil fuel investments to ones focused on a greener economy is a natural and vital action in combatting climate change. Understanding what you are investing in through your retirement plan is even easier these days through helpful websites like” – Timothy Yee at Green Retirement Inc. 

Influence systemic change 

Now, it’s time to get loud. Get loud about your financial stability, your sustainable investments, and how you have educated yourself on how you can achieve your financial and environmental goals simultaneously. Share your actions and learnings with others in your industry. Start a coalition with others by sharing the results from these public rating tools and start explaining how easy and empowering it is to make the switch. You can play a role in growing a movement of individuals and businesses that invest their values! 

Be persistent in sharing your findings because as Flannery O’Connor stated earlier in this post, the truth may be difficult to accept, but that does not change that it is, in fact, true. Even if values are not the driving factor for your network, the most important fact to acknowledge is that environmentally harmful investments have disturbing financial risks.  

“The US Department of Labor has removed barriers to considering ESG factors in retirement plans with its rule effective January 1, 2023. ESG factors look at, among other things, the impact of fossil fuel investing on performance, which will influence systemic change.” – Timothy Yee at Green Retirement Inc. 

Small- to medium-enterprises are already known for their drive and determination, and these qualities can help drive systemic change. A 401K plan can help businesses attract and retain talent, incentivize performance, and lower taxes, while helping employees meet their financial and climate goals. Directing retirement and employee investments towards sustainable funds makes a significant difference, influences systemic change, and ensures your money is supporting the values that you embody every day. Due to the resources provided by the pioneers mentioned within this article, together we can achieve security and profitability through purposeful finance today.