Charity workers want pensions to be more engaged with ethical investment

Research by Queen Mary, University of London reveals that nearly three quarters of charity workers believe investment in companies that operate responsibly is one of the most important pension attributes.

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Dr Bernadette Kamleitner
Dr Bernadette Kamleitner

The study, in conjunction with The Pensions Trust, has undertaken one of the largest surveys of charity workers views on pensions in the UK. The report found that whilst the size of the pension pot at retirement is still the most important attribute of a pension for the majority, scoring 7.93 on average on a 9 point scale, it is followed closely by investment in ethical companies, which scored 7.64.

Author of the study, Dr Bernadette Kamleitner, a marketing lecturer at Queen Mary, said: “We were interested in which factors people take into account and what their views on ethical investment were. We were positively surprised by the extent of interest uncovered.”

On average, younger members and women reported more interest in ethical investment, with 83% of those under 35 showing a moderate to high interest in ethical investment, compared to 61% of those over 65. Similarly, 76% of women believe ethical investment is important in comparison to 66% of men.

Interestingly the survey reveals that charity workers want their pension provider to take action, not just via negative screening, but also to be much more engaged shareholders:  looking at environmental, social and corporate governance (ESG) performance; providers that are active in voting engagement and schemes that undertake positive screening.

The areas of ethical investment that respondents are most concerned about are weapons, pornography and child labour, with 79%, 82% and 92% respectively showing they were extremely or moderately concerned about those issues. In relation to this, 83% would most like their pension fund to press companies into behaving more responsibly with regards to child labour, and 74% for improving their human rights record.

When asked what positive practices charity workers would like to encourage companies to undertake, 83% said helping to improve the standards of living for people in the developing world as well as treating workers and communities fairly and minimising a company’s impact on the environment were extremely important to them.

Sarah Smart, Chair of the Trustee of The Pensions Trust, said: “We wanted to get views from the charity sector about what was important to them when considering their investment and it is clear that they want ESG issues to be high on the pensions investment agenda. Furthermore, with 61% of respondents claiming that they are likely to invest more responsibly in the future, we can clearly see that this is becoming an influential and key deciding factor for people choosing their pension funds.”

Dr Bernadette Kamleitner, Marketing Lecturer at Queen Mary University of London continued: “The survey allowed us to further our understanding of what people in the third sector expect from responsible investment products and which investment strategies they want to see implemented.  We want to see the option of responsible investment products gain further ground in people’s minds and in the market place.”