By Adam Bennot

There is little point in making provision for a comfortable retirement if the society and environment in which you live is untenable. Nor will you actually have a decent pension if the retirement industry doesn’t make sustainable investments with positive social and environmental impacts.

The two are inextricably linked. From a public policy perspective, many stakeholders believe that impact investing can provide a public good, particularly in areas where the government lacks the resources. For pension fund trustees, the argument may be around why capital should be used to finance projects that should have been funded by government expenditure.

The answer is quite simple. In South Africa, we have reached a point that if we don’t act now and make sustainable investments with positive social and environmental impacts, we are unlikely to generate stable, long-term returns. The Covid-19 pandemic has harshly reminded us of the acute issues around health and how closely health outcomes are related to poverty, lack of adequate education, human rights, the environment and racial, gender and income inequality.

For long-term investors, of which pension funds are the quintessential example, sustainability should be an important concern. An unhealthy, unstable, and unsustainable economy cannot serve investors who have a multi-decade investment horizon, and who are concerned about the livelihoods of the next generation and beyond.

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