Pension funds should be wary of governments and too much focus on environmental, social and governance (ESG) investments, Freemasons Pension Scheme chair David Bennett-Rees has said.

Speaking at the eighth annual World Pensions Forum in Brussels today, 23 May 2019, on a panel debate on long-term investment, risk management and the current industry environment, Bennett-Rees said the government should not use pension funds for social engineering.

“One thing you shouldn’t do, is to be influenced by government. Government should not be able to use pension funds for social engineering, I really dislike that,” the UK pension fund chair said.

“I reject being asked to fund projects that the government should fund and I am very wary of too much ESG. That may be critical here, people like ESG. ESG to me is only valuable if gives enhanced returns. You shouldn’t do it for the sake of just ticking a box.”

Furthermore, when discussing geo-political influences on investments with a leading French pension executive, who mentioned that Brexit is part of a growing uncertainty, Bennett-Rees said “Brexit is necessary”.

The multi-billion French pension executive said the rule of law under which pension funds operate in terms of international diversification is a challenge in the current climate.

“I think the environment for us as changed at the beginning of the century. I would see the Iraq war as the start of a period of big disagreements,” he said. “I think we have entered a period of radical uncertainty and the framework under which we carry our lives as long-term investors is changing, and not for the better.

“I would agree with those people who say that we are at a new cold war and ready for a technology cold war,” he said.

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