I’m pleased to see that research conducted by PensionBee, has revealed a rapidly emerging mainstream consensus among 2000 of their customers regarding where – and how – they want their money invested.
Over 80% of those surveyed want transparency about which companies their pensions are invested in, along with information about their business activities. More than half of respondents across all age groups would prefer to balance making money with creating positive social outcomes, while a further 16% of all respondents would get behind entirely removing companies that focus solely on profit at the expense of social outcomes.
- 61% of consumers would like to see an active screening approach towards tobacco companies, with more than half of those (35% in total) favouring outright removal. This is consistent across all age groups and particularly pronounced among women (74% vs. 57% of men).
- 63% of consumers advocate for investing in an ‘engage with consequences’ approach when it comes to oil companies, with 15% favouring outright removal and 21% opting for a do-nothing approach.
- 61% of consumers want providers to remove companies investing in banned weapons from their pensions. This is consistent across age groups, but the preference is higher amongst women (82% vs. 53% for men).
- 65% of consumers would like pension providers to engage on their behalf, both privately (33%) and through public voting (32%) while a further 12% advocated for a straight removal of companies based on ethical concerns.
In addition to revealing an overall desire among savers for a more transparent approach to pensions investments, the findings also indicate that younger savers are more inclined to take decisive action, with 44% of savers aged 30 and under favouring outright removal of companies that are accused of breaking international laws (vs. 35% of those over the age of 50). The data also indicates that women are more prone to making ethics-driven decisions, as evidenced by 82% of female respondents opting to remove all companies that make banned weapons.
How is the pensions industry doing so far?
Auto Enrolment has led to a £400 billion boom in pension saving, with 13.3 million UK employees now actively invested in a workplace pension. An estimated 90% of these savers have automatically invested in a “default” fund selected by their employer.
Share Actions’s research has shown that pension providers and trustees have paid scant attention to the environmental, social and governance preferences of their members, including climate change and international conventions on human rights.
PensionBee’s research shows a growing gap between the views of modern pension savers and mainstream default pension products.
It’s a shame that the Government ditched a mandatory requirement for trustees to survey pension savers on their investment values . Judging by Pension Bee’s survey, it removed a critical catalyst for change.
At least one company’s listening!
It looks like Pension Bee aren’t just going to put this research on the shelf. CEO Romi Savova clearly’s in no mood to sit on her hands
Pension investments have the ability to transform the world we live in while generating healthy returns for savers. We are ready to kickstart the necessary change and will be considering appropriate actions for our investment plans following these survey results.”
and Pension Bee’s Clare Reilly continues in the same vein
Our customers have made their voice clear: pension savers should benefit financially and socially from their investments. We do not want government reforms for environmental and social concerns to be reflected in pensions to become a tick-box exercise
A message to trustee -IGC and GAA chairs
Last year’s round of reports saw plenty of talk and pretty little action on responsible investment.
You should be requiring the platform , fund and asset managers you oversee to be clear about their intentions to adapt to the new world we are living in.
At the same time you should be doing what Pension Bee have done, and talk to savers about what they want
Where there are options to upgrade to a more responsible approach, these should be tested to see whether adopting them would have a positive, negative or neutral impact on saver’s outcomes.
You should be reporting back to your savers on options for developing defaults.
I know , from talking to progressive providers, that much of this is being done, but there is still much to do.
My analysis of this year’s IGC reports will focus on whether these conversations are being had and what will be done in 2020, to ensure that by April 2021, responsible investing will be embedded in all workplace pension defaults.