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Pension funds fall short on climate change plans

Polar-bears-walking-on-melting-ice-showing-climate-change-700.jpgOnly 5 per cent of the UK’s largest pension funds have climate change policies in place despite a pending requirement for trustees to justify any decision to disregard environmental, social and governance factors.

In the wake of continuing concerns about climate change, the Department for Work and Pensions announced that the rules on ESG issues will come into place from next September.

According to the Financial Times, law firm Pinsent Masons analysed 43 funds, finding none had a target for investment in energy-efficient or sustainable assets.

Pinsent Masons head of pensions and long-term savings Carolyn Saunders says: “It has been apparent for some time that climate change issues can affect financial returns. However, in the absence of a standardised approach to climate-risk management in investments, most trustees are unsure how best to deal with the issue.”

The analysis also shows none of the pension funds examined excluded particular funds from clients’ portfolio due to them not meeting a climate criteria.

Three quarters of pension funds analysed include mention of ESG, but still do not have specific targets or policies in place.

LGIM acts against companies failing to tackle climate change

Money Marketing reported last month that the FCA is looking to crack down on climate change, after a discussion paper revealed over 90 per cent of workplace pension schemes have their savings in default investment strategies that do not consider climate change.

FCA chief executive Andrew Bailey said: “The FCA can play a key role in providing more structure and protection to consumers for green finance products and ensuring that the market develops in an orderly and fairway which meets users’ needs.”


BlackRock adds model portfolios and ETFs to ESG range

BlackRock continues to ride the sustainable investing trend with a launch of a new set of model portfolios and ETFs. The asset manager has introduced six sustainable ETFs and five ESG model portfolios for financial advisers in a range of risk profiles and implemented through UCITS iShares ETFs. Starting today, the company will also disclose […]

Hortense Bioy

Behind the numbers: How passive ESG funds really fare against their active rivals

A deeper look into how to make sustainable investing possible through the use of passive funds Sustainable investing has become a hot topic as more and more investors are looking to align their investments with their values. The market share of European equity funds that consider environmental, social and governance factors has almost doubled to […]


Pensions minister: ESG rules will help demystify pensions for younger savers

Auto-enrolment has transformed saving and new regulations will help the pensions industry keep up. In 2012, pensions saving ebbed to a new low. Just 42 per cent of eligible private sector workers were participating in a workplace pension. Just six years on, that figure has soared to 81 per cent. The impact of auto-enrolment has […]


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