UK. Pension schemes still playing ‘catch-up’ on ESG despite increased awareness
Just 10 per cent of pension schemes have a standalone policy on environmental, social and governance (ESG) issues, research from Mercer has revealed, prompting concerns that pension schemes are playing ‘catch-up’ on improving ESG outcomes.
The analysis, which utilised data from Mercer’s Responsible Investment Total Evaluation (Rite) analysis of more than 650 UK occupational pension schemes, also revealed that only 6 per cent of schemes have a standalone policy related specifically to climate change.
And whilst stewardship was carried out for many schemes by investment managers, the majority of schemes assessed stated that they do not carry out regular reviews of asset managers’ stewardship records.
In addition to this, only 13 per cent of trustees analysed had conducted analysis of carbon intensity and climate change scenarios, whilst just over a third (37 per cent) were working to align with or beyond sponsor’s ESG policies.
However, the research suggested that pension schemes are taking the issue seriously, with 98 per cent of trustees agreeing that ESG issues can have a material impact on financial returns.
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