UK - Watson Wyatt have told pension funds that as long term investors they could benefit most from an environmental, social and governance (ESG) approach to investing.
In a report on sustainable investment the consultancy said the underlying rational behind ESG principals was a financial one, enabling pension funds to exploit issues and opportunities in a less well covered area of company research.
Jane Goodland who recently joined Watson Wyatt’s global manager research team, said: “ We have seen a marked increase in interest in ESG from UK pension funds, with much of the demand originating from the pension funds themselves.”
She said she believed that public pension funds were in the vanguard of the move to ESG but that corporate plans were increasingly interested too. “This may be because lobbyists have been more successful with government funds,” she said.
Paul Trickett, European Head of Investment Consulting at Watson Wyatt, commented: “Pension funds need more confidence that broader considerations such as ESG issues are consistent with their requirement to act in the best financial interests of members. Our analysis of research in this regard provides evidence to support this view.”
Partner Insight: Members' evolving needs and expectations are driving changes in scheme administration. As the pensions landscape inevitably continues to change, how will your scheme's approach need to develop to keep pace?
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