Calandro adds, “Cracking the code on the 401(k) market would put ESG-themed [environmental, social and governance] funds squarely in front of workplace employees.” That would particularly hold true for the nearly 90 percent of millennials who, according to Povaddo, want sustainable investing options.

Not only could the move prove popular with a growing millennial workforce, but it offers businesses other benefits as well.

Corporations that add ESG funds to employee contribution plans get an assist in moving toward their sustainability policies and align with the United Nations Sustainable Development Goals and Principles for Responsible Investment, according to a 2017 white paper from shareholder advocacy group As You Sow.

As an example of how effective ESG offerings can be for employee engagement — as well as in encouraging them to save more for retirement — the report cites real estate services firm Stok, which began offering fossil-free fund options that also were screened for financial performance.

Before doing so, Stok’s employee participation rate in its 401(k) was 14 percent, and the individual contribution rate was just 1.6 percent. Among employees’ criticism of the plan was this: “It doesn’t make sense for me to invest my hard-earned money into business models that are destroying the future.”

But that all changed when ESG entered the picture.

Stok partnered with HIP Investor’s mutual fund ratings and Communitas Financial Planning to offer ESG funds that exceeded performance indicators, and within two years employee retirement plan participation jumped to 95 percent with a contribution rate of 7.1 percent.

Now, more than 75 percent of Stok’s employees invest their 401(k) plan to be completely fossil free.