Incorporating Sustainability into Investments Helps Protect Our Economy and Environment

Considering sustainability when making our investment options has clearly become a must-have.

As devastating droughts and wildfires become an annual occurrence across the western U.S., it is impossible to ignore the consequences of climate change. In addition to upending food security, natural systems, infrastructure and human health — with 20 extreme weather events causing over $1 billion damage each in the U.S. during 2021 — the total economic cost was around $145 billion last year alone.

The same risks that pose a threat to communities, families and businesses also have an impact on our employees’ retirement security, as economic losses from extreme weather events continue to occur. This is why Sierra Nevada Brewing Co. and other companies support efforts to protect the pension and retirement funds of hardworking Americans from climate risk.

The U.S. Department of Labor (DOL) is currently reviewing comments submitted for a proposed rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, which opens the door for retirement fund sponsors to include more sustainable options in their retirement saving plans. It reverses the prior administration’s restrictions on 401(k) and retirement plans that prevented investors from considering environmental, social and governance (ESG) factors as part of their investment decision-making and proxy voting. These restrictions effectively meant American workers and retirees were denied access to ESG investment opportunities that offer competitive returns and reduce risks to their investments.

Employees are drawn to companies like Sierra Nevada because they live the same values: embracing a philosophy that balances environmental, social, and economic needs.

Employees want and deserve access to retirement investment options that include considerations for climate change risk, social impact and economic resiliency. The DOL’s rule conforms with longstanding policy and the Employee Retirement Income Security Act of 1974, which was passed to protect employees’ investment interests. Retirement and pension plans covered under this act hold more than $10 trillion in assets, covering about 141 million workers and their beneficiaries.

Most Americans invest in the stock market through their retirement funds. However, few 401(k) plans include ESG options despite studies that show these funds consistently outperform relative to the market. In addition to commanding higher-than-average returns and lower risk, demand is growing for these types of funds, particularly from younger workers who prioritize sustainability when investing.

As we transition from fossil fuels to renewable energy and other low-carbon technologies, we have the opportunity to build a more resilient economy that will maintain competitiveness. While the DOL rule will allow Sierra Nevada to integrate our employee retirement options with our company values, its importance stretches far beyond our walls — marking a key step toward building long-term resiliency into our economy.

We encourage all employees to continue asking their employers and plan providers about the availability of retirement funds that include ESG considerations, generate competitive returns, and align with a sustainable and thriving economy.

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Image credit: City of Chico via Facebook