More than three-quarters (76 per cent) of pension schemes in the UK are incorporating social factors into their investment or stewardship policies, according to a survey.

The poll of pension professionals conducted at the Pensions and Lifetime Savings Association (PLSA) ESG Conference found that 17 per cent had not yet done so but planned to.

However, one in 20 (5 per cent) were not incorporating social factors and had no plan to do so.

In the session on the Department for Work and Pensions’ (DWP) Taskforce on Social Factors, Aegon UK head of responsible investment and taskforce co-chair, Hilkka Komulainen, described the poll results as “encouraging”.

“We’ve been very conscious about not going into another TCFD report for social, or something equivalent,” she said.

“We’re trying to bear in mind that schemes already have a lot of things on their plate, and how we can make this as simple as possible.”

The lack of data or data quality was highlighted as the key challenge schemes face in incorporating social factors into their investment decisions and monitoring by 43 per cent of respondents, followed by 34 per cent stating that it was due to the lack of clarity on what social factors are or how they can be addressed.

Resource or bandwidth issues was identified as the key challenge by 17 per cent of schemes, while 4 per cent said uncertainty around whether social factors were material in investing was the primary challenge.

“You will see that in our recommendations we are addressing a lot of different stakeholders in addition to pension trustees and decision makers,” Komulainen noted.

The PLSA also polled attendees on whether they sought member views on social factors.

More than half (54 per cent) said they did, while 22 per cent did not but planned to, and another 22 per cent did not and were not expecting to.

During the session, the PLSA announced that it would be publishing some case studies for members on social factors in the near future.

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