A number of UK pension schemes say they struggle to report on their ESG policies to a high standard and are largely unfamiliar with risks associated with climate change.
Caceis, a custody bank, found that over 40% of trustees and pension managers that it surveyed in the UK did not feel properly equipped to monitor and report on their schemes’ ESG policies to the standard they wanted.
Nearly three quarters of pension schemes were unfamiliar with climate change-related risks, while 26% said they found it a challenge to get access to the right kind of information.
According to Caceis, ESG reporting for the schemes is labour intensive and time-consuming because of this “information gap.”
The asset servicer’s study comes after the implementation last year of legislation requiring trustees to outline how they approach financially material factors, including ESG, into investment decision processes.
Over half of the pension schemes that took part in the survey said they believed that exposure to ESG-related investments would increase significantly over the next three years. Nearly 60% felt that ESG integration aligns with the values of pension scheme members.
Pat Sharman, a managing director at Caceis, said: “From a corporate citizenship perspective, as well as fiduciary requirement, implementing climate change and good ESG principles will be important for pension schemes of all shapes and sizes to help manage longer term risks for the benefit of members.”
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