When companies think about sustainability, they often focus on reducing emissions, improving supply chains, and strengthening workplace culture. But there is another area worth exploring: employee retirement benefits.
Retirement plans help employees prepare for their financial futures, and their investment options influence how retirement savings are allocated. For employers looking to connect sustainability commitments with the employee experience, retirement benefits may offer another opportunity.
According to a Morgan Stanley 2025 Sustainable Signals report, 88% of surveyed investors globally expressed interest in sustainable investing, including 99% of Gen Z and 97% of Millennial investors. These findings suggest that sustainability is a consideration for many potential employees. Could retirement benefits be an opportunity for employers to better understand and respond to employees' interests?
Employee Values and Company Culture
Employees consider many factors when evaluating an employer, including compensation, workplace culture, and opportunities for professional growth. Environmental commitments and social responsibility may also influence their expectations.
In 2023, the Deloitte Center for Integrated Research found that one in three young adults (18–24) has turned down a job due to the employer’s ESG record. While sustainability is only one part of the employee experience, this finding highlights why organizations may want to examine how their commitments connect with employee priorities.
Retirement benefits are another part of that conversation. Employees interested in climate change or responsible investing may want to understand whether their retirement plans offer investment options that reflect their values. Still, financial goals, risk tolerance, and time horizons differ. Instead, employers can focus on making existing options easier to understand and helping employees make informed decisions.
The Gap Between Available Options and Employee Awareness
The 2025 Sustainable Investment Options in Employer Retirement Plans report by Morgan Stanley’s Institute for Sustainable Investing identified a notable gap in retirement plan awareness. More than 80% of surveyed U.S. companies reported offering some sustainable investment options in their employee retirement plans, yet only 36% of surveyed individuals with 401(k)s knew their plans offered them.
This raises an important question for HR and benefits teams: Are employees aware of the options already available to them?
Before introducing new investment options or changing a retirement plan, employers can start by improving communication. Companies could organize plan resources, offer retirement education sessions, explain ESG concepts, and direct employees to reliable information about fund objectives, fees, and risks. Schroders' 2022 U.S. Retirement Survey found that 74% of surveyed retirement plan participants said they would or might increase their overall contribution rate if ESG investment options were offered, compared with 69% in 2021.
Using employee engagement surveys, benefits assessments, or optional discussions, HR teams can ask employees:
How confident are you in understanding your retirement investment options?
What information would help you make more informed decisions?
Would you be interested in learning about sustainable investing?
Which retirement benefit topics would you like explained more?
Through employee engagement, organizations can also examine how their existing policies, programs, and benefits connect with the values and needs of their employees, while simultaneously strengthening their sustainability efforts.
Ready to Learn More About Your Retirement Plan’s Impact?
Investature is here to help! Visit the Investature Intentional Investing Lens for Plans to measure the financed emissions in your employer-sponsored retirement plan, and explore the Investature Intentional Investing Lens for Individuals to learn more about your investments’ impact.
Want to meet one-on-one? Email jessica.cohen@investature.com with your company and a few times that work, and we'll set up a free 30-minute call.
