The politicisation of ESG, rising inflation and slowing GDP growth are among the key challenges facing large pension funds as they seek to balance short-term economic pressures and structural long-term changes, a new report says. Assets under management (AUM) at the world’s top 300 pension funds increased by 8.9% to reach a record US$23.6 trillion in 2021, according to annual research published by the Thinking Ahead Institute. The growth rate is slower than 2020’s 11.5%, but takes five-year cumulative growth to 50.2% in the period between 2016-2021. “Pension funds are under immense governance pressure from all sides, with a growing politicisation of ESG in some regions meeting calls for more substantial and urgent climate action,” said Marisa Hall, Co-head of the institute. North America now accounts for 45.6% of assets of the world’s 300 largest pension funds, up from 41.7% at the end of 2020. European pension funds account for 25.9% and Asia-Pacific 25.5%, with the remaining 4% from Latin America and Africa.
ESG Among Headwinds Facing World’s Largest Pension Funds
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