Almost seven out of 10 (68 per cent) of DC pension savers say responsible investment is still of interest to them post pandemic, research from the Defined Contribution Investment Forum (DCIF) has found.
The survey, of 1,000 current and deferred DC members suggests savers are as interested in ESG as they were the previous year.
Almost nine out of 10 (87 per cent) of members felt businesses have a wider social responsibility outside of making a profit, a figure which has not changed since 2020. Additionally, 72 per cent of members felt strongly about environmental issues, this shows a drop of only 1 per cent from 2020.
Figures also show that awareness of responsible investment is particularly high among men, with 27 per cent having heard of responsible investment. Meanwhile, 34 per cent of women admit to not knowing about responsible investment — an increase of 27 per cent from last year’s figures.
Responsible investment, or ESG (environment, social and governance) considers the impact company investments have on the environment, workers and society, which in turn impacts its own reputation and ultimately influences share prices. DCIF analysis however, suggests that 57 per cent of members with mid-range pension pots (£20-£50k) — around 13 per cent of the total number of members surveyed — are less likely to want businesses that their pensions are invested in to be chosen due to having wider social responsibilities.
Overall though, ethical issues are of interest to an increasing number of members from this group with 73 per cent not wanting their pension provider to make unethical investments, up from 64 per cent in 2018.
DCIF chair Elaine Alston says: “Members’ enthusiasm for ESG issues remains strong. For example, 87 per cent agree that businesses have a wider social responsibility than simply making a profit – the same as last year, and a little up from the 81 per cent who agreed with this statement in 2018. The pensions industry should take note. Even before the pandemic, we saw more enthusiasm for ESG among the young, and the pandemic has strengthened their views.
“Once people start to take a greater interest in where their pension savings are invested, the industry risks disillusionment unless they have a powerful story to tell about how people’s money is doing good. Conversely, this is also a fantastic opportunity. If we, as an industry, can get this right and start talking more about the power of pensions, it could be the key to getting people engaged.”
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