Pensions should be more engaged with ethical investment, with responsible operations an important attribute, say 72 per cent of charity workers, according to the Pensions Trust.

The multi-employer occupational pension fund in the UK for the Third Sector also found that young people feel more strongly about ethical investing than other age groups.
However, the size of a pension pot at retirement is still viewed as the most important attribute of a pension for the majority of respondents, scoring 7.93 out of nine on average, followed by investment in ethical companies, at 7.64 out of nine.

"We were interested in which factors people take into account and what their views on ethical investment were," commented author of the study, Dr Bernadette Kamleitner, marketing lecturer at Queen Mary. "We were positively surprised by the extent of interest uncovered."

Eighty-three per cent of those under 35 showed a moderate to high interest in ethical investment, compared to 61 per cent of those over 65.

Charity workers want their pension provider to take action, by negative screening (80 per cent) and by being much more engaged shareholders. They should look at environmental, social and corporate governance (ESG) performance (69 per cent), providers that are active in voting engagement (67 per cent) and schemes that undertake positive screening (63 per cent).

Weapons, pornography and child labour are the areas of ethical investment that respondents are most concerned about.

"We wanted to get views from the charity sector about what was important to them when considering their investment and it is clear that they want ESG issues to be high on the pensions investment agenda," added Sarah Smart, chair of the trustee of the Pensions Trust. "Furthermore, with 61 per cent of respondents claiming that they are likely to invest more responsibly in future, we can clearly see that this is becoming an influential and key deciding factor for people choosing their pension funds. At The Pensions Trust, we are committed to providing a service that meets our members' needs, and with ethical investment high on the priority list for many, we are currently looking into ways we can upgrade our offering to make responsible investment a key element of our schemes."

The Pensions Trust worked with Queen Mary, University of London, and Mercer for design input.

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