Saturday, Jan 11

Welcome to Your Daily Dot where Dot will share tips, advice, and stories on how we can make our world better.

A Message From Bluedot Living’s President:

I grew up in the Pacific Palisades in Los Angeles. As a teen I routinely went to the “show” on Saturdays to see a double bill with my best friends, and happily wander the small shops in the Village. The Palisades was a small town in a sprawling city where everyone had a sense of community and neighborhood pride, a place people loved. My old friend Bill Bruns, once a top editor/reporter for Life Magazine, ran the Palisadian Post with the same dedication he gave to his award-winning national assignments. His wife, Pam, taught journalism five days a week as a volunteer at the local high school, my high school. She inspired hundreds of kids. Their house is gone. So are the homes of dozens of my friends, too many to mention, but among the thousands lost from the Palisades to Altadena on the other side of Los Angeles. 

Today I set aside my optimism to shed tears for my friends, my old town, and the planet. These raging weather events are part of a much bigger picture that we need to grapple with. Maybe it’s time to truly embrace a post-fossil fuel future and remember, we’re all in this together. 

Thank you for being a Bluedot reader. 

– Victoria Riskin

Dear Dot,

Does Dot know anything about responsible investing for 401(k) plans? I was looking at mine last night and realized I have an aggressive portfolio and know nothing about the companies.

—Ali

Dear Ali,

While Dot tends to glaze over at any talk of investments, I do value your question because it’s one that many of us — including me — should consider. After all, over a third of the American workforce has a 401(k)-style retirement account. And so I will do my best to steer you and your (potential) fortune toward environmentally responsible and fiscally sound waters. 

Let’s dive in: While financial managers are getting better at investing in socially responsible funds, investment accounts are still heavily polluted with stocks in companies that have poor environmental track records. 

As far as environmentally wise retirement funds go, 401(k)s are a bit tricky, because these plans are controlled by employers, many of whom are hesitant to invest in Environmental, Social, and Governance (ESG) funds. It’s not that they’re bad people, but rather that they take their fiduciary responsibilities seriously, and there’s a widespread belief that ESG funds are riskier than ordinary funds (whose more reliable earnings may come at a cost to the world).  

In 2018, the Department of Labor advised that financial planners should forgo ESG funds for opportunities with a proven return record, but it has since switched course and endorsed climate and social considerations for fiduciaries. And with good reason: A number of studies, including a 2021 report by BlackRock, have found that portfolios divested from fossil fuels have fared as well or better than traditional portfolios. 

That being said, financial planners overseeing 401(k)s are supposed to answer to the interests of the plan holders — that’s you, Ali — so theoretically you could have some sway over what your planner invests in. 

In a very informative article in the New York Times a couple of years ago, Ron Lieber offered some advice for making your voice heard in 401(k) decisions. He suggested that you first try talking with your investment manager about socially conscious investing. If you don’t already know who the investment manager is, you can typically get the name from HR. 

“Now, rally your like-minded friends (the more the better) and get ready to make your case,” Lieber says. That way the investment manager will know that there’s a significant constituency in the company that values ESG investments.

There’s plenty more to consider, so invest your time in reading the rest of Dot’s answer. 

Paid Advertisement with NativePath

New year, new you! This winter, kickstart your wellness journey with NativePath Collagen Powder. With its potent formula, you’ll experience stronger joints, improved skin elasticity, and better muscle recovery. Whether your resolution is to stay active or to take better care of your skin, NativePath Collagen is here to help you start the new year feeling your best.

Give yourself the gift of vitality as you head into the new year.

Paid Advertisement with Babbel

Whether you’re studying abroad, dreaming of future travel, or just feeling the itch to learn something new this fall, now’s the time to start speaking a new language with Babbel. From Spanish and French to Italian, the Babbel method focuses on learning through speaking. With just 10 minutes a day, you could start having actual conversations in 3 weeks. Bluedot Living readers can use this exclusive link to get up to 55% off today!