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How Sustainable Is Your 401(k) Plan?

Even funds without an intentionally sustainable mandate can score well under our Sustainability Rating methodology.

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Investor interest in sustainability issues continues to grow, especially among younger investors. As Jon Hale noted back in March, this interest led us to launch our new Morningstar Sustainability Rating, a tool that allows investors to assess the underlying sustainability profile of most managed investment products, not just the small percentage of funds with an intentionally sustainable investment approach.

Such sustainable funds tend to score very well under our sustainability methodology, and some investors have access to offerings from well-known players in the sustainable/socially responsible space, such as Parnassus, Neuberger Berman, and Calvert, via their employer-sponsored retirement funds. Yet no intentionally sustainable funds show up among the 100 funds that have garnered the most assets from defined-contribution plans. However, that doesn't mean retirement investors don't have access to investment options that score well under our new sustainability metrics.

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David Harrell does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.