Almost one in five (18%) respondents would like to see 100% of their pension scheme invested in a fund that avoids anything where there may be a negative environemental, social or goverance impact, according to research by the Ethical Investment Research and Information Service (EIRIS).
Its research, which was launched to coincide with the UK’s National Ethical Investment Week, from 13 to 19 October, surveyed 2,015 adults.
Almost two-thirds (65%) of respondents felt that it was either essential or very important that a pension scheme invests in organisations that act in line with conventions and principles that prevent child labour, while 65% felt the same about preventing forced labour, 55% about respecting workers’ rights, 54% about protecting human rights and 46% about safeguarding the environment.
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Only 10% of respondents would like to be informed about how far a pension fund complies with global conventions and principles when selecting a fund for the first time, while 43% would like to be informed annually of how their funds implement these in their investments, 18% would like to be informed every six months and 18% would like to be informed quarterly.
The research also found:
- 19% of respondents would either be very or fairly interested in switching the standard default pension investment offered by their employer to a green and ethical product even if its financial performance rates and benefits were slightly less than other similar pension funds that do not have an ethical or green focus.
- 45% of respondents would be either very or fairly interested in switching if the financial performance rates and benefits of the ethical or green fund were as good as other pension funds without such a focus.
Stephen Hine (pictured), head of responsible investment development at EIRIS, said: “We continue to see an increase in the amount of money being invested in green and ethical funds, reflecting the wider interest in being ethical and sustainable in purchasing decisions.
“Not surprisingly, they want their pension funds to address environmental and social factors as well, so this provides a challenge and an opportunity for providers of [defined contribution] pension [schemes].
“It’s also encouraging that individuals are keen to see their pension providers be transparent about how they ensure their underlying investments follow best practice.”