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Greater ESG transparency demanded of pensions

7 April 2021

Investors are demanding greater ESG transparency from their pension provider, new research from Aviva has revealed.

Almost two thirds (63%) of individuals want pension companies to be more environmentally transparent in where they invest their pensions, with nearly one in five (18%) placing highest importance on financial services companies ensuring their investments have a positive impact on society over the long term. Despite this, over half (55%) of those surveyed did not know where their money was invested.

Separate research from the investment provider also showed a clear shift in attitudes over the last four years with concerns about climate change having doubled to become the second biggest global concern last year behind disease and pandemics.

However, Aviva said that while environmentally friendly investments were marching up investors’ priority list, the overwhelming majority of individuals (71%) with savings, investments, a pension or an annuity agreed that they want the highest return on their investment. Even among those who hold a responsible investment, two fifths (40%) do so because they believe they will get a better return in the long-run.

Laura Stewart-Smith, head of workplace savings and retirement, Aviva, said: “We find over 90% of people saving for their retirement are pension apathetic, just using the default fund for their investment. It’s therefore critical that pension providers continually seek to evolve to help ensure consumers know how to invest in a world we all want to retire into.”

Aviva has struck a partnership with fintech start-up Tumelo to enable pension members to see which companies their pension is invested into and to have a voice on the ESG issues these companies are facing.

Stewart-Smith added: “Our research shows pension savers want their investments to have a positive impact on the world. Through our partnership with Tumelo, we’re hoping to give our workplace pension members greater transparency over where their pensions are invested while empowering them to play an active part in the engagement and voting approach to investing. By doing so, pension savers are being given collective power to influence some of the biggest organisations in the world into making more responsible decisions.”

Georgia Stewart, chief executive officer, Tumelo, commented: “We’re delighted to be working with Aviva in helping to give their workplace pension customers transparency and a voice. By harnessing the prominence of well-known brands and real-life ESG issues, Tumelo’s platform is reforming how customers engage with their investments. By re-connecting individuals with their savings and working closely with the experts who steward these funds, we are aiming to improve individual financial outcomes and build a better world for all of us.”

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