A lack of younger representatives on trustee boards pushes issues such as climate change into the future, ShareAction investor engagement manager Anne-Marie Williams has said.

“I think one of the problems with pension fund trustee boards has been, and we see it all the time, is the lack of age diversity of the board; it often tends to be people over a certain age, mostly men. Very few of these boards have young savers who are really in touch with environmental risks,” she explained in an interview with Pensions Age.

The Pensions Regulator chief executive Lesley Titcomb has previously criticised trustee board diversity, claiming the industry is “behind the game”. Research by the regulator found that 82 per cent of trustees are male and just 18 per cent female; eight per cent of trustees are under 40 and only one in 10 chairs of trustee boards are female.

Williams said the correlation between lack of diversity and attitude towards environmental risks is something she sees right across the industry and consequently, often issues like climate change get pushed into the future. On pension funds’ attitudes to climate risk, she said they “vary hugely”.

“At the most progressive end you have got schemes such as the Environment Agency Pension Fund and some of the other local authority schemes that are looking to divest their fossil fuels, but a lot of the schemes are still see the binary between looking at responsible investment and things like climate change and financial returns. They think that if they look at ESG issues then it is going to jeopardise their financial returns, whereas studies have shown this is not the case.”

Despite this thinking, she highlighted research published by the University of Hamburg in 2016 which looked at the aggregate evidence of more than 2000 empirical studies on the relation between incorporation of environmental, social and governance criteria and corporate financial performance.

The study found that “the orientation toward long-term responsible investing should be important for all kinds of rational investors in order to fulfil their fiduciary duties and may better align investors’ interests with the broader objectives of society”.

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