Voya Financial announced that it has become what it says is the first publicly-traded company to receive an Environmental, Social, and Governance (ESG) Retirement Plan Certification from DALBAR.
Voya received the certification, along with a five-star rating, for the 401k plans offered to its own employees. DALBAR’s ESG Plan Certification is an annual process to evaluate a plan’s success in actively applying ESG principles to its retirement plan.
DALBAR’s ESG Retirement Plan Certification includes a review of all ESG factors, including:
- Environmental factors such as paper suppression, automatic enrollment, and online capabilities;
- Social factors like matching contributions and phone center capabilities; and
- Governance factors, such as plan fees, regulation compliance, and investment policy.
The underlying principle of the ESG Plan Certification is the recognition of providing an incentive for continuous improvement of plans to achieve this goal, where a five-star rating is achieved by supporting environmental, social, and governance characteristics.
Receiving the ESG Retirement Plan Certification can benefit both employers and employees themselves, including attracting new talent to a company that offers a plan with a commitment to serving the community.
“While the topic of ESG has grown in popularity over the last several years, particularly as it pertains to investments within a plan, we recognize that building strong ESG practices into workplace benefits and a retirement plan involves multiple considerations,” Heather Lavallee, CEO of Wealth Solutions for Voya Financial, said in a statement. “Whether looking at digital capabilities that can reduce print consumption or plan enrollment and default investment options, there are many factors to consider when looking at ways you can incorporate ESG best practices in a retirement plan.”
ESG principles integrate themselves into the individual operations and decisions a company makes on a day-to-day basis, including an employer’s retirement plan. What’s more, the interest in ESG is becoming increasingly important to individuals themselves, according to Voya research.
More than half (60%) of individuals say they would likely contribute more to an ESG-aligned retirement plan if it was certified — and the majority (83%) of working Americans find it important to apply ESG principles to workplace benefits. The combination of increased participation and higher contribution rates can ultimately help create an increase in retirement security for more participants.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
