Did you know that pension funds command over 30 percent of the New York Stock Exchange? Most people, even those who recycle diligently and work to protect the environment, have no idea if their pension funds are invested in polluters or responsible companies.

Just imagine what would happen if all pension-holders claimed their power as stockholders to push for corporate accountability. Through socially and environmentally responsible investing, there is a way.

Socially and environmentally responsible investing (SRI) is sometimes called "investing with your values." It's a way to divert your money away from destructive uses, and invest in companies and institutions whose products, services and practices contribute to a sustainable society. Through screening your investments and claiming your shareholder power, money becomes more than a tool for exchanging wealth, money becomes a tool for change.

The Green Paycheck campaign is a grassroots effort by Friends of the Earth members to claim the power of our pension investments to affect positive change in our communities and build a sustainable future - both here in the United States and around the world.

How to Green Your Pension Fund

It's as easy as going to your human resources or benefits officer and asking. If you don't have this option, follow the steps below to help obtain a socially responsible pension alternative.

Step 2. Find out how your pension plan is managed.

This will help determine how difficult (or easy) it will be to set up an SRI option in your workplace. There are usually two ways pensions are managed:

A) Bundled Plans: Your employer contracts out to one company which takes care all aspects of the pension plan -- from record keeping to actually investing in different portfolios. This is called a "bundled" plan. If your employer has a bundled plan, it will probably be more difficult to get an SRI alternative, since all aspects of pension management happen under one roof.

Action: Encourage your pension manager to include an SRI alternative.

Strategy: Let's say you work for a large company (1000 employees or more) and your employer uses Merrill Lynch to manage its pensions. Ask Merrill Lynch to offer a SRI pension alternative; investment companies will listen to the needs of their clients -- ultimately, you. If they see a demonstrated demand for an SRI pension option, "traditional" investment companies can search out SRI options, by contracting with SRI money managers or hiring social research/ screening firms.

If you work for a small company, try the same strategy. More and more traditional investment companies are responding to public demand and starting to offer screened options. In small companies, you may have an easier time convincing co-workers and management to switch over to a plan which accommodates SRI options.

B) Unbundled plans: Your employer contracts out to a number of firms to manage and invest its pensions. As you can imagine, with "unbundled" plans, it is much easier to add an SRI option.

Action: Tack on an additional pension alternative managed by an SRI fund.

Strategy: Proceed to Step 3.

Step 3. Find out if your plan is employer- or employee-directed.

This too will help determine how difficult (or easy) it will be to obtain an SRI alternative:

A) Defined Benefit: Employer-driven plans, often called defined benefit plans, will give you regular payments during retirement, based on your years of service, salary, etc. With employer-driven plans, how do you know if your pension money is being used to support polluters? How do you get an SRI alternative?

Action: Work for more democracy in pension policy. You may not be able to green your whole pension or establish a socially responsible pension portfolio; but through shareholder activism (using your fund's shareholder status to talk with companies about environmental issues, voting for green shareholder resolutions, introducing shareholder proposals), you can work to integrate employees' values and visions in your retirement investments.

Strategy: Start a dialogue with management. Begin with finding out who is in charge of our pension plan -- there may be a Chief Financial Officer, or a Board of Trustees. Then find out who is the pension fund's money manager. Chances are that the money manager that handles your pension is not an SRI practitioner.

Then start a dialogue with management. Perhaps you and a few co-workers could make a presentation to the Trustees, write a memo to the CFO, or circulate a petition. Tell them that as a plan beneficiary, you don't want to support corporate polluters, weapons production, child labor, etc. Find out how to influence the decision-making process in your pension system. Are employees represented on your Investment Committee? If not, how can you be included? How do decision-makers receive input from plan participants? How can you increase your influence?

Having employees' voices heard in pension investment decisions is an issue of democracy: it's your money, you're taking the risks, and you should have a say in how your retirement savings are used.

B) Defined Contribution: Employee-driven plans, often called defined contribution plans, are tax-deferred savings plans for retirement purposes. The problem with defined contribution plans is that most people take one look at the jumble of numbers on their pension statement, assume a bewildered expression, and toss the statement.

Action: You can do yourself and the environment a favor by becoming more educated about your managed investments and establishing an environmentally-screened pension plan at your workplace.

Strategy: A good start to increasing your financial literacy is to find out more about your pension investments. Click here to look at sample pension statements.

Also, ask your employer to sponsor a workshop on self-directed pension plans. The Pension and Welfare Benefits Administration (Department of Labor) issued an Interpretive Bulletin in 1996 on Participant Investment Education. Because of the growing popularity of defined contribution plans and the fact that most participants need to be further educated about financial management and decision-making, the Department of Labor is encouraging companies to educate their employees with: plan information, general financial and investment information, asset allocation models (models which take a look at what different kinds of investment packages can do over given time periods), and interactive investment materials.

To find out how to set up an SRI pension option with a defined contribution plan, proceed to Step 4.

Step 4. Take charge of your green.

A popular and rapidly-growing type of defined contribution plan is the 401(k) plan. A 401(k) allows both the employer and the employee to make tax-deferred contributions to supplement the basic retirement plan.

When you participate in a 401(k), you select a mutual fund in which to invest your money. The key to greening your pension investment is to select an SRI fund -- one which screens the investment portfolio for non-financial factors -- to manage your 401(k). For tips on how to lobby for an SRI option in a defined contribution plan, click here.

If your employer offers a 401(k) plan, ask for information (enrollment materials, a list of options, the way it starts, etc.) and consider enrolling, preferably one that's socially and environmentally responsible! You may also want to think about opening up an Individual Retirement Account and have this managed by an SRI specialist.

Self-employed, municipal government, and non-profit employees have defined contribution plans similar to 401(k)'s. Your human resources manager can tell you which plan applies to your workplace.