EUROPE - More than half (56%) of EU corporate pension funds now have an SRI policy in place while a quarter of those without intend to implement one within the next 12 months, research shows.
Eurosif's 2011 Corporate Pension Funds Study of 169 respondents from 12 EU member states found 60% believed ESG factors affect pension funds' long-term performance, while 66% felt having an SRI policy was part of their fiduciary duty.
The survey, backed by DB Advisors and HSBC Global Asset Management, is the first comprehensive EU-wide examination of to what extent and in what manner corporate pension funds across Europe have adopted sustainable investment practices, Eurosif said.
Equities, bonds and real estate were the most popular asset classes for the implementation of corporate pension fund SRI policies, while commodities were covered by only 7% of the survey respondents.
The study also found the three instruments most commonly used for SRI policy implementation were voting, negative screening and integration, with country variations. Voting is widespread among Spanish, Dutch and British funds, while negative screening is frequently used in Austria, Spain and Sweden. Engagement is most common in Austria, the UK and the Netherlands.
Eurosif executive director François Passant said: "For the first time on this scale, it has been shown that the inclusion of ESG factors in the investment philosophies of European pension funds is, overall becoming mainstream with such high percentages of European pension funds already having or planning to have an SRI policy in place.
"Certainly, there is still a long way to go but the study clearly shows that pension funds take their fiduciary duty seriously. The debate thus moves from whether or not a pension fund should have an SRI policy to how to design the most appropriate SRI policy."
Members of the Pensions and Lifetime Savings Association (PLSA) have given a green light to changes to the trade body's constitution and articles of association.
The newly-appointed chairman of the Pensions and Lifetime Savings Association (PLSA) has pledged to "open up" the organisation in a bid to improve policy development.
The Department for Work and Pensions (DWP) has suggested its forthcoming white paper on defined benefit (DB) provision will only show the direction of travel on consolidation, rather give than a definitive answer.
A raft of consultations and draft regulations will greet the industry over the coming weeks and months, the pensions and financial inclusion minister confirms.