A shareholder advocacy group is pushing Comcast and Amazon to examine why they don’t offer more ”sustainable” funds to employees through their 401(k) retirement plans, arguing that the lack of such options is out of sync with the stated climate goals at each company.

The proposal would require the board of each company to produce a report on the issue. As You Sow brought the measure and it received a green light from the Securities and Exchange Commission to go up for an investor vote at this year’s annual meetings — Amazon’s on May 25 and Comcast’s on June 1.

The companies are both opposed to the measure and had asked the SEC to allow them to exclude it from a vote.

The proposal comes as the Biden Administration takes stock of the financial risks posed by climate change. The Department of Labor, which regulates company retirement plans, has proposed a rule that could make it easier for plan sponsors to consider climate change and ESG factors — environmental, social, and governance — in the investment options offered to employees.

The Labor Department is also asking for public input, through May 16, on what other actions it could take to safeguard worker savings from “climate-related financial risk,” such as collecting more data on how retirement plans are factoring that risk into investment decisions.

Andrew Behar, CEO of As You Sow, says many company 401(k)s “don’t have options for people who think that climate change is risky.” Amazon makes one sustainable option available to employees, he said, while Comcast does not offer any.

The California-based group tries to get companies to change business practices on environmental and social issues. Last year, out of 86 shareholder resolutions As You Sow filed, it withdrew 48 of them when companies agreed to requested changes. Another five resolutions won majority support from investors.

As You Sow also runs a site called InvestYourValues, which rates the extent to which retirement plans at more than a dozen major companies — including Google, Microsoft, Visa, and Facebook — are invested in private prisons and firearms, along with fossil fuels and deforestation.

“People are putting their retirement funding into companies that are going to make sure there’s not a livable planet to retire into,” Behar said. “We’re all doing this without our own knowledge about it.”

Both Comcast and Amazon argue that they have a fiduciary duty to act in the best interest of 401(k) plan participants and legally cannot tie investment retirement offerings to their operational climate goals.

“The proposal’s request appears to be based on a flawed understanding of the basic fiduciary requirements that underpin investment options in U.S. retirement plans,” Comcast said in a recent SEC filing. The “selection of the 401(k) investment options by the responsible plan fiduciary must be made independently from our environmental sustainability leadership and operational climate goals.”

Similarly, Amazon said: “The law mandates that the responsible plan fiduciary makes its selection decisions ‘solely’ in the interest of plan participants and beneficiaries,” according to a filing. Amazon noted that in addition to offering one ESG fund, its 401(k) also allows employees to find and invest in other ESG-friendly funds by using what’s called a self-directed brokerage option.

Comcast did not comment beyond its filing, and Amazon did not return a request for comment.

The popularity of ESG-related investing has grown, particularly since the 2008 financial crisis, said Wharton School finance professor Christopher Geczy.

Changes in the issues that people identify with and the ability to create estimates of CO2 equivalents — a way of comparing greenhouse gas emissions — have helped to make “environmental and sustainability focuses just much more prevalent,” Geczy said.

ESG options still are not widely available inside retirement plans. The Plan Sponsor Council of America’s most recent member survey found that 4.7% of 401(k) plans offered an ESG option in 2020.

The top reasons plans cited for not offering an ESG fund included “haven’t considered” at 59.1%, “insufficient participant interest” at 28.9%, and “unclear regulatory factors” at 26.4%.

Depending on the presidential administration, regulators have taken different views of whether plan sponsors can factor in ESG. Republicans have been less supportive of incorporating ESG and Democrats more so.

Another issue, Geczy said, is that ESG funds can be more expensive if they are “actively” managed, in contrast to lower-cost passive funds. Higher-cost funds can attract lawsuits claiming retirement plan participants are being charged too much.

Geczy said there is evidence that some ESG criteria is informative about how companies perform. But he also said it is a complicated space, and trustees and fiduciaries of retirement plans face concerns about maintaining diversification of investments, and whether they’d be sacrificing returns.

“It may be possible not to give up returns, but ... at least, I think you want to be eyes wide open as an investor when you start dealing with sustainability as a selection mechanism,” Geczy said.

There may be a place in a 401(k) lineup for an ESG option, for investors who want that option, “but how you present it really matters,” said JP Aubry, associate director at the Center for Retirement Research at Boston College.

“Someone may want to select that because they just don’t want to be involved with” certain types of companies, Aubry said. “They may be willing to take a slightly lower return just to not be involved with those firms. But you don’t want people believing that doing this is changing the world and getting them higher returns” if that’s not the case.

Behar said part of As You Sow’s aim is educational — so that employees ask questions about what kinds of funds are being made available to them.

“We’re trying to send up some warning flares and go, ‘Hey folks, this is your money, you worked hard for it, it is under your control,’” Behar said.