April 2024
04Apr

US. NYC Pensions Reach Deal With RBC to Publish Green-Funding Ratio

New York City retirement plans reached an agreement with Royal Bank of Canada for the lender to disclose how much financing it provides for clean-energy projects relative to fossil fuels. Canada’s largest bank is the third financial giant to agree to begin disclosing the ratio after New York Comptroller Brad Lander and the city’s public-pension boards filed shareholder resolutions with six banks in January. The proposal was set to be voted upon at Toronto-based Royal Bank’s annual meeting next week. “We’re...

April 4, 2024
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March 2024
22Mar

Pension funds and fossil fuel phase-out: historical developments and limitations of pension climate strategies

 By Clara McDonnell Despite the decades of international climate negotiations and several landmark agreements, global efforts to date to restrict fossil fuel production in line with climate targets have been unsuccessful. As national and international policies continue to fall short of phasing out fossil fuels, increasing attention has been paid to non-state actors, like pension funds, as a potential source of more ambitious climate action. As major asset owners, large shareholders in fossil fuel companies, and historically activist investors, pension...

March 22, 2024
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20Mar

UK Spring Budget – Pensions proposals silent on sustainability

The UK government’s Spring Budget last week put an emphasis on investments in the UK but creates more risks for long-term savers by not sufficiently addressing sustainability risks. Pension funds and their investments have a direct influence on environmental, social, and economic outcomes. In order to secure the long-term financial interest of beneficiaries, pension funds have a responsibility to consider whether system-level sustainability risks will affect their ability to do this[1]. A key topic of the UK Spring Budget, also addressed in the...

March 20, 2024
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15Mar

The next stage of ESG evolution in the pension landscape

By Investment Institute A juggernaut that’s losing momentum or just refiring its engine? This question on ESG investing has come to the fore due to a confluence of exceptional events in 2022. After meeting investors’ return expectations since the 2015 Paris Agreement, last year’s savage bear market hit a broad range of investment strategies, no matter their intrinsic merits. ESG was no exception. The episode showed that ESG investments are exposed to periodic setbacks due to a larger dynamic that has little to do with...

March 15, 2024
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15Mar

Unpackaging ESG: Evidence from 401(k) Investment

By Jiaxing Tian & Jiahong Shi We study how investors respond to scandals related to three distinct aspects of ESG--E(nvironmental), S(ocial) and G(overnance)--in their retirement savings. Using data on 401(k) investments, we show that nearby ESG scandals correlate with increased ESG fund additions and flows, possibly through ``evoking'' their existing sustainable preferences. Investors with different characteristics respond heterogeneously to E, S and G scandals. In magnitude, old investors are twice as likely as young investors to add ESG funds to...

March 15, 2024
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08Mar

The anti-ESG backlash is playing out across the US as pensions and investments become a political football

After years of headlines about the growing environmental, social, and governance (ESG) movement in investing, ESG has been met with understandable skepticism from taxpayers, who both underwrite state and local government pension plans and government borrowing. After all, if the managers of these operations take their focus off properly balancing risk and return–pursuing ideological investment goals instead–taxpayers could be on the hook for hundreds of billions in additional liabilities. Yet, that focus must go in both directions. Forcing those...

March 8, 2024
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01Mar

Pension funds’ role in Brazil’s farmland controversy

Global pension funds are implicated in the deforestation of Brazil's Cerrado, impacting local communities and climate goals. In short: Armed men, allegedly hired by land claimants, have forcibly displaced local communities in Brazil's Cerrado, destroying homes and livelihoods. Major global pension funds, including TIAA, have invested billions in Brazilian farmland, contributing to deforestation and land conflicts. The destruction of the Cerrado, a key carbon sink and biodiversity hotspot, poses significant challenges to Brazil's climate commitments and local ecosystems. Key quote: “There’s a...

March 1, 2024
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February 2024
29Feb

UK. Pioneering Responsible Investment: How Pension Schemes Lead with ESG Initiatives

In an era where environmental, social, and governance (ESG) factors are becoming paramount in investment decisions, pension schemes and asset managers are taking significant strides towards responsible investing. Notable entities like Scottish Widows, Railpen, Nest, AXA Investment Managers, Franklin Templeton, and Legal & General Investment Management (LGIM) are setting benchmarks by emphasizing initiatives that not only foster financial returns but also contribute positively to society and the environment. Championing Social Factors in Investments Scottish Widows has made headlines by focusing on...

February 29, 2024
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26Feb

Investors trying to change the world: Why climate investing is so difficult

Responsible asset owners are preparing their portfolios for the climate transition, reducing holdings in companies with high emissions and pledging billions to climate investments. But climate proofing portfolios is proving one of the most arduous and complex challenges investors have ever faced. Like concerns that many of the underlying companies in their portfolios haven’t meaningfully reduced their emissions; or the fact investors know they need to continue to provide capital to hard to abate sectors yet the financial rewards for...

February 26, 2024
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23Feb

UK. TPR urges trustees to ‘take stock’ of wider ESG factors

The Pensions Regulator (TPR) has urged pension trustees to "take stock" and think about further developing their approach to managing wider environmental social and governance (ESG) risks and opportunities. In a blog post, TPR climate and sustainability lead, Mark Hill, noted that ESG disclosure reporting requirements have expanded, suggesting that this is a trend that looks set to continue as practices around wider sustainability factors, such as nature and social, develop. Whilst Hill acknowledged that climate reporting will already be business...

February 23, 2024
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