Rise in ESG Expectations for UK Pension Schemes

Integrated HR and pensions consulting firm Buck has found that 67% of UK companies now expect to include ESG criteria in their pension scheme investment choices. This figure illustrates a marked jump from 28% of respondents expecting ESG criteria to be included in their pension scheme investment choices in 2018. Buck said this demonstrates a “significant shift in attitudes that has taken place over the last four years”. It also said that the trend in defined contribution (DC) pension scheme investment reflects a “wider change as companies continue to develop their corporate social responsibility policies and seek to promote cultures which embrace diversity, equity and inclusion”. Support for ESG provisions was high among respondents, with 44% saying that the default fund should incorporate ESG principles and 60% of respondents stating that members should be able to choose investment options which reflect their religious or social beliefs. Mark Pemberthy, Benefits Consulting Leader at Buck in the UK, said: “It’s encouraging to see that workplace DC pension schemes in the U.K. are taking steps to reflect this changing sentiment. Communicating ESG-related activity can also be a fantastic way to increase engagement among scheme members.” 

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