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Call for more ethical and SRI funds in workplace pensions

21 November 2019

Chase de Vere has urged product providers to offer greater access to ethical and socially responsible investment funds in their workplace pensions, amid growing demand among both employers and employees for money to be invested responsibly.

More than 10 million employees currently save into a workplace pension following the launch of auto enrolment in 2012. Various studies have shown the vast majority of employees invest in their scheme’s default pension fund, while a recent survey by Invesco found that 72% of scheme members thought it was a “good idea” if their scheme included responsible or ethical investments as part of the default fund.

But while an increasing number of corporate clients want socially responsible investments to be easily accessible to their employees through workplace pensions, many providers are doing little more than paying lip service to it, according to Chase de Vere. The firm said the exception was Aviva, following the launch of a default pension strategy based on its Stewardship fund range, which excludes companies that fail to meet certain ethical standards or that harm society or the environment.

However, Chase de Vere said whether people invest in ethical funds should not be down to “the lucky dip of which pension provider their employer has chosen” and said it was time for all providers to “stand up and do their part.”

Rebecca Dorrian, corporate consultant, Chase de Vere, commented: “We need to see far more specific ethical and socially responsible default funds being made available and, at the very least, all providers should be paying far more consideration to these areas

“ Auto enrolment has the opportunity to be a ‘game changer’ in terms of the retirement prospects of millions of people in the UK. An increased focus on investments in areas which are beneficial to society and to the environment can only help to increase engagement amongst employees.”

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