Sixty per cent of a group of large pension funds across North America, Europe and Australasia believe they will fail to achieve their net zero goals under current conditions, new research has revealed.

This pessimistic outlook — disclosed by Create-Research, which surveyed 50 large funds that collectively manage €3.3tn (£2.9tn) in assets — comes despite more than half of those surveyed having either already embedded or are in the process of incorporating net zero strategies into their portfolios.

The findings will also give active managers pause for thought. More than half of the respondents see passive investments as permanent features in their climate portfolios.

Sixteen per cent of respondents have fully embedded climate change objectives into their investment portfolios, the research found.

Meanwhile, 42 per cent of funds are currently implementing strategies, while 22 per cent are “close to decision-making”, and a fifth of funds are “at the awareness-raising stage”.

Just 28 per cent of funds have interim targets for their net zero strategies, with 30 per cent not setting interim goals, and 42 per cent saying that these would not be applicable.

In May, LCP confirmed that six of the UK’s eight bulk annuity insurers had set interim goals for achieving their own net zero targets.

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