Sixty per cent of pension schemes have moved away from a traditional investment approach to a responsible or sustainable approach, according to XPS.

The survey of over 400 trustees and employers at XPS Pensions Group’s annual conference yesterday, found that the remaining 40 per cent still have a traditional investment approach.

In addition, 25 per cent of pension schemes acknowledge climate change as a risk out of their control, and 73 per cent believe that pension schemes should seek to positively influence climate change action.

During the conference, industry specialists discussed the key areas of concern for trustees and pension schemes including, member profiling and engagement, optimising support and protection to ensure members achieve better outcomes and the global impact of climate change.

Pension schemes are now required to incorporate Environmental, Social and Governance (ESG) factors into their investment strategies. With it being evident that returns are not detrimentally affected by investing responsibly, now is the time to take action.

Commenting, XPS Pensions Group CIO Simeon Willis, said: “The world is changing and so must the way we invest. UK pension schemes underestimate the power they have to influence change by incorporating ESG and sustainability into their long-term strategy.

“Investments are no longer just about risk and reward, an additional ESG lens and measurable outcomes for wider society need to be a considered. Trustees need to evaluate their investment managers and demand more, standing up for what they and their members want. This is an opportunity for change, not just a box ticking exercise.”

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