The results of a poll of over 200 pension professionals attending an XPS event ‘Sustainability and Profitability – Striking the Right Balance for Pension Schemes’ were as follows:
• 50% thought the current fiduciary duty of trustees restricts their ability to make decisions in the best interests of their membership around climate change
• 94% believed returns can have a positive effect on society without necessarily detracting from financial returns
• 85% thought that pension scheme investment should make a contribution to changing the trajectory of climate change
The audience, consisting mainly of trustees, pensions mangers and corporate sponsors shows how far views have changed and that pension schemes are seeking to make ESG considerations and climate change a central part of their investment strategy
Recently ShareAction have campaigned that a “responsible investment bill” be considered. Their focus being to incorporate wider considerations other than purely financial objectives within the definition of what is considered to be in a member’s “best interests”.
Sarita Gosrani, Head of ESG investing at XPS said: “Knowing the importance of ESG and climate risk but feeling conflicted from a fiduciary duty perspective will hinder some trustees from taking important action within their schemes. The proposal for a responsible investment bill was primarily intended to prompt the debate. However there seems to be a growing weight of opinion that it could play an important role in prompting a much needed shift for trustees to not only think long term but to explicitly consider all factors that can impact member outcomes.”
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