Two thirds of savers (63 per cent) want pension companies to be more “environmentally transparent” about where their money is being invested.
This research by Aviva shows that more than half of consumer have no idea where their money is currently invested. Almost a fifth of them (18 per cent) place the highest importance on these investments having a positive impact on society over the long term.
This survey comes as Aviva announces a pilot with fintech start up Tumelo, which offers an investor opinion tool, allowing workplace members to voice opinions on a range of ESG issues.
While more investors want their pension to be invested sustainability, the research shows that a far larger proportion – 71 per cent – also want the highest return on their investment. However a sizeable proportion of investors are looking to ESG investment to boost returns. The survey found that of those who hold a responsible investment, two fifths (40 per cent) do so because they believe they will get a better return in the long-run.
The complexities of devising effective ESG strategies for pension companies was shown in the fact one in four (25 per cent) savers wanted their pension to remain invested in fossil fuel companies for the purpose of influencing the decisions they make in transitioning to low carbon companies.
Aviva said research on consumer attitudes generally shows there has been a clear shift in over the last four years with fears about climate change having doubled to become the second biggest global concern last year. Not surprisingly people’s biggest concern was disease and pandemics.
Aviva’s head of workplace savings & retirement Laura Stewart-Smith, said: “We find over 90 per cent of people saving for their retirement are ‘pension apathetic’, just using the default fund for their investment.
“It’s therefore critical that pension providers continually seek to evolve to help ensure consumers know how to invest in a world we all want to retire into.”
Aviva is piloting an investor opinion tool with fintech start-up Tumelo and a selection of workplace pension customers.
Tumelo’s platform helps individual pension members to see which companies their pension is invested into and to have a voice on the environmental, social and governance (ESG) issues these companies are facing.
A selection of pension savers whose workplace pension scheme is with Aviva have the option to voice their opinion on issues such as climate change, gender equality, human rights, chemical pollution, and political lobbying ahead of the companies’ AGMs.
Their opinions are collected through the platform, anonymised, and sent back to the fund manager, which incorporates them into its decision-making framework. The real-world impact is then reported back to members once the AGM has passed.
Stewart-Smith adds: “Our new research suggests a quarter of consumers want their money invested in fossil fuel companies for the sole purpose of influencing their decisions towards becoming lower carbon companies.
“Through our partnership with Tumelo, we’re hoping to give our workplace pension members greater transparency over where their pensions are invested while empowering them to play an active part in the engagement and voting approach to investing. By doing so, pension savers are being given collective power to influence some of the biggest organisations in the world into making more responsible decisions.”
Aviva says it is also bringing more funds to members, giving them the power to choose whether they use their savings to drive the transition to a low carbon economy, minimise their investment in polluting industries or help have a positive impact on the planet.
Aviva says it is also working towards making default options Net Zero as well.
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