DC members showing ‘groundswell’ of ESG interest, says DCIF

Defined contribution (DC) member attitudes toward environmental, social and governance (ESG) issues are changing quickly in a “groundswell of interest”, according to a report from the DC Investment Forum (DCIF).

Survey results collected from DC pension holders for the organisation’s The Key to Unlocking Member Engagement report showed that 87 per cent believed businesses have a wider social responsibility than making a profit, up from 81 per cent in 2018.

DCIF said that 69 per cent of respondents were interested in responsible investing, noting that “older people are just as interested as younger people, despite it often being reported that younger people care more about these sorts of issues”.

The report, prepared by Ignition House, noted that two-thirds of respondents (66 per cent) said they were worried about the state of the world and felt responsible for making a difference, up from 59 per cent in 2018.

More than three-quarters (83 per cent) thought it was important to protect the most vulnerable members of society, compared with 74 per cent two years ago, while more than half (58 per cent) said they would boycott a brand or company if they disagreed with their ethics or behaviour.

DCIF chair, Hilary Inglis, commented: “This research demonstrates that once people understand the implications of ESG, they are keen that their pension savings are invested in this way. At present, there is still a disconnect between the great work being done across the industry and people’s understanding and awareness of ESG issues.”

This disconnect is apparent in the survey’s revelation that only 9 per cent of respondents thought they had actively invested their DC money in climate-friendly funds, while just 16 per cent were aware of responsible investment.

Ignition House co-founder, Janette Weir, said: “In 2018, we surveyed members on ESG for the first time and questioned whether it could be the key to unlocking member engagement. While members still don’t always make the link between their pension savings and the wider world, they now care even more about ESG than they did two years ago.

“It seems inevitable that we will reach a tipping point where they make the connection and their feelings spill over into action. We hope this report will provide pension schemes with the evidence they need to act now to become more responsible investors.”

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