Industry voice: Can ESG help drive value for DC scheme members?



We asked J.P. Morgan Asset Management's Annabel Tonry about the potential of environmental investments.

The environmental market is now worth $2trn globally, and consists of companies which have a low environmental impact or which develop environmental solutions. By 2020, the sector is expected to grow to $3trn. Attitudes towards protecting the planet have certainly changed in recent years.

That is partly because a growing proportion of the population has personal experience of the damage ecological degradation can cause. Furthermore, sustainable investing has received a shot in the arm due to the sharp drop in the cost of technologies such as renewable energy, water recycling and agri-tech.

Speaking to Professional Pensions, Annabel Tonry says the drive towards sustainable investing is happening but it will take time.

"We have started to see a growing interest in ESG from the DC industry, however, I think there's still a relatively low level of understanding around what ESG is, how it's defined, its applicability and what it can mean for your investment return. The requirement on trustees now is they do need to consider ESG factors, at least on a very basic level, and its impact upon long-term returns and I would expect to see increasing interest from DC plans."

Click here to learn about why DC schemes should take a flexible approach in a low-return environment.

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