A new report claims that more than two million employees from 12 tech-sector companies, including Apple, could have earned an estimated $5.1 billion in additional returns had their companies moved to decarbonize their retirement plan holdings 10 years ago.
The report comes from researchers at the University of Waterloo (Canada), in partnership with As You Sow, a shareholder advocacy nonprofit. It analyzed the 401(k) plans of the Big Five tech companies – Amazon, Apple, Google, Meta, and Microsoft – and seven additional tech companies: Adobe, Broadcom, Intuit, Netflix, Oracle, Qualcomm, and SAP America.
The report claims that, despite these companies publicly announcing climate goals and often asserting climate-friendly branding, they continue to invest billions of dollars of employee savings into fossil fuels and other industries accelerating climate change.
Fossil fuel stocks have underperformed the broader stock market over the last decade and are an increasingly risky long-term investment. This underperformance means that employees have missed out on returns by remaining invested in fossil fuels, saysAndrew Behar, CEO of As You Sow.
Looking at the fund options offered by 12 tech-sector retirement plans, the report estimated cumulative 10-year returns with and without fossil fuel energy sector investments, and found a difference of +8.9%, or +0.86% per year invested in favor of fossil fuel-free portfolios. The funds analyzed were equity funds and target date funds, using data from company filings with the U.S. Department of Labor.
Nearly 50% of the assets analyzed were in target date funds from Vanguard and BlackRock, the world’s largest investors in fossil fuels. Both asset managers’ target date funds showed higher 10-year returns without fossil fuels. Target date funds are often used as the default investment option for corporate 401(k) plans, which means that many employees may be unknowingly investing in fossil fuels.
The lost potential returns per company analyzed in the report, over 10 years, amount to (in millions of dollars):
- Adobe Inc. 401(k) Retirement Savings Plan: $129
- Amazon 401(k) Plan: $570
- Apple 401(k) Plan: $476
- Broadcom U.S. 401(k) Plan: $207
- Google LLC 401(k) Savings Plan: $1,152
- Intuit Inc. 401(k) Plan: $89
- Meta Platforms, Inc. 401(k) Plan: $304
- Microsoft Corporation Savings Plus 401(k) Plan: $898
- Netflix 401(k) Plan: $46
- Oracle Corporation 401(k) Savings and Investment Plan: $719
- Qualcomm Incorporated Employee Savings and Retirement Plan: $230
- SAP America, Inc. 401(k) Plan: $271
