One in two pension professional are concerned that trustees’ fiduciary duties are hindering their ability to address climate change effectively.
These surprising results were in a poll taken at a resent XPS event, looking at sustainability and profitability of pension schemes.
The poll of over 200 pension professionals – including trustees pension managers and corporate sponsors – found 50 per cent thought current fiduciary duties were restricting the ability of trustees to make decisions in the best interests of their membership around climate change.
The range of questions asked show that the vast majority of attendees believe investing sustainably can have a positive effect on society, without necessarily detracting from financial returns. 94 per cent of those polled agreed with this statement while 85 per cent stating that pension scheme investments should make a contribution to changing the trajectory of climate change.
XPS says this shows how far views have changed within the DC pension sector regarding ESG investment and how climate change is becoming a key part of many schemes’ investment strategy.
XPS head of ESG investing Sarita Gosrani says: “Knowing the importance of ESG and climate risk but feeling conflicted from a fiduciary duty perspective will hinder some trustees from taking important action within their schemes.
“The proposal for a responsible investment bill was primarily intended to prompt the debate. However there seems to be a growing weight of opinion that it could play an important role in prompting a much needed shift for trustees to not only think long term but to explicitly consider all factors that can impact member outcomes.”
Recently ShareAction have campaigned that a “responsible investment bill” be considered, which would focus on incorporating wider considerations other than purely financial objectives within the definition of what is considered to be in a member’s “best interests”.
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