Over 80% of Americans see climate change as a threat, but climate-friendly funds hold less than 1% of 401(k) money. Sphere launched SPFFX to make it easy for every employer to offer climate-friendly investment options via their 401(k)s. The fund invests in the top 500 US companies by market capitalization, excluding the fossil fuel companies that are in that list.
Beyond avoiding fossil fuel company investments, the Sphere fund votes the shares in the companies the fund does own in a planet-friendly way. Sphere uses the As You Vote proxy voting service from non-profit organization As You Sow, giving investors a voice by encouraging the companies it invests in to take climate action.
Employers, also known as plan sponsors, have a fiduciary responsibility to ensure that investment options offered in plan lineups do not compromise on performance, even when aligning with the climate values of employees. The Sphere approach relies on research showing that excluding fossil fuel companies has improved returns across 1, 3, and 5 year time frames. Over a forty-year period, the investment performance of portfolios that exclude fossil fuel production companies does not significantly differ in terms of risk and return from those that include them. Sphere index’s 10-year back test validates the academic findings. This simple approach makes it possible for plan sponsors to add SPFFX to a plan with confidence that there is documented reasoning for doing so from a fiduciary perspective.
SPFFX is offered at an expense ratio of 0.07%, avoiding a 10-30x pricing premium that is often added to environmentally-focused funds. This pricing is intended to make it appropriate for 401(k) plans, where excessive fee lawsuits are common.
“Adding SPFFX to Ascensus makes climate-friendly investing available to millions more investors across the country,” said Alex Wright-Gladstein, founder and CEO of Sphere. “We could not be more pleased to be working with these world-class investment platforms to make climate-friendly investing available and affordable for all.”
Sphere is a registered public benefit corporation that is on a mission to get climate-friendly investment options in every 401(k). The company sponsors climate-friendly financial products that are designed for 401(k) plans, allowing retirement plan fiduciaries to maintain their commitment to fiduciary duty without having to compromise on climate. Learn more at www.oursphere.org. For more information reach out to firstname.lastname@example.org.
To learn more about investing in the Sphere 500 fund via Ascensus: www.oursphere.org/news/vanguard-ascensus