Client Affairs

ESG Phenomenon: ESG Holding Little Sway With Pensions

Editorial Staff 30 October 2020

ESG Phenomenon: ESG Holding Little Sway With Pensions

We gather developments and commentary in and around the ESG investment space.

Pensions and Investor Surveys
Pay attention to surveys and the main byproduct of COVID-19 has been increasing interest in ESG and values-driven investing and decreasing interest in ESG and value-based investing, depending on whose results are being considered. Polling investors in September, American Century asset management found interest in impact investing on the wane from a year ago as economic priorities hit home. Another poll from Aviva investors, suggests ESG is very much top of mind and entering the mix.

While Aviva found 55 per cent of investors saying that COVID-19 has put ESG considerations front and centre, this was not the case for pensions holdings, and the survey's more interesting reveal.

Roughly two-thirds of people holding private pensions have taken no action on where their money is invested since set up, whether to maximise returns, choose funds that reflect their personal beliefs more closely, or invest in companies with good ESG records, Aviva reported.

Among pension holders who always consider ESG factors, results were also surprisingly low, with just 40 per cent making changes that align with their beliefs more consistently.

It suggests “a huge amount of ongoing investment is not being considered through an ESG lens, even where investors clearly have an interest in these considerations with other financial products,” Aviva reported.

Head of savings and retirement Alistair McQueen points out that even though 2019 saw for the first time, a majority of working age people investing in a pension, "many have yet to make the connection between their pension and its investing potential."

“Lockdown appears to have kick-started an interest in using money as a force for good,” but many of those investors are at the beginning of that journey, he said.

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