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September 23, 2010
Bill Would Give Federal Employees a Sustainable Investment Option
    by Robert Kropp

Rhode Island Congressman Langevin introduces bill to allow for investment by federal employees in companies committed to corporate responsibility.


Yesterday, Democratic Congressman Jim Langevin of Rhode Island introduced the Federal Employees Responsible Investment Act (FERIA), which would add a sustainable investment option to the Thrift Savings Plan (TSP), the retirement savings and investment plan for federal employees. The bill would direct the Federal Retirement Thrift Investment Board (FRTIB) to select a Corporate Responsibility Index as an investment option for federal employees.

According to a press release from Congressman Langevin's office, "The index would include companies that meet strict financial criteria, in addition to having strong corporate governance, sustainable environmental policies and practices, solid workplace relations, positive community involvement, safe products, and respect for human rights around the world."

Congressman Langevin said, "The reckless actions of financial institutions over the past few years provide a clear illustration of why we need to place a greater importance on good corporate governance."

"We must create an environment in which businesses take care of - and are held accountable to - their shareholders, employees and customers," he continued. "Making an investment in companies that are committed to corporate responsibility will have a positive impact on our financial system, while empowering federal employees to reward companies that share their values."

The index selected would also demonstrate returns comparable to the other investment options available. According to the Social Investment Forum (SIF), three out of four large cap socially responsible and sustainable investment (SRI) mutual funds outperformed the S&P 500 by an average of six percent in 2009.

Lisa Woll, CEO of SIF, said, "Investors are increasingly turning to SRI options because good corporate governance and performance on social and environmental issues are often indicators of financial success, good management and less risk."

At present, employees of 17 states are offered the option of investing retirement dollars in SRI funds.

 

 
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