A Review of ESG Fund Allocations Among New, Do-it-yourself Defined Contribution Plan ParticipantsAReviewofESGFundAllocationsAmongNew,Do-it-yourselfDefinedContributionPlanParticipants

Investment strategies focused on Environmental, Social, and Governance (ESG) issues have been receiving increased interest among defined contribution (DC) plan sponsors, consultants, and regulators recently despite the relatively low adoption and level of assets in DC plans today. This research explores the allocation decisions of 9,324 new DC participants, across 108 DC plans, who are self-directing their accounts (i.e., are “do-it-yourself” (DIY) investors) and have at least one ESG fund available in their plan’s core menu. While this sample is relatively small, the implied participant population required to generate this final dataset is approximately two million participants, given the filters applied and the data requirements.