OK, you’re sceptical about surveys and so are we at IE mag, but these findings are interesting because they reveal a certain level of distrust regarding `green’ pension investment. Especially when it’s compulsory.
A survey amongst 1,003 Britons aged 40 and over with pension savings, carried out by Opinium for My Pension Expert, has revealed pension investors approach to Environmental, Social and Corporate Governance (ESG) within their retirement strategies. It found:• Well under half (43%) of people support the UK Government placing pressure on pension schemes to transition away from investments that are driving deforestation • A mere 36%, or about one third, support the UK Government’s policies that force pension schemes to mitigate for climate change • However some 45% want pension schemes to make their ESG information more accessible – presumably so they know that their cash is being spent on wind turbines that cannot generate electricity if the wind is too light, or too strong.
MINORITY REPORT Do consumers want pensions invested solely in green/climate change schemes? Hmm, a minority do apparently. Just one in seven (15%) claims that ESG is a consideration within their retirement investment strategy. When it comes to self-managed pension portfolios, or investment schemes, only 9% have incorporated ESG into their retirement strategy within the previous five years. Even fewer (7%) have discussed their ESG preferences with an independent financial adviser. Andrew Megson, executive chairman of My Pension Expert said: “British enthusiasm for ESG-based retirement strategies, and government policies, is evident. But without the right information, it will be impossible for Britons to make informed investment choices that support their personal ethics.
IE COMMENTThat’s an interesting spin on the survey results which clearly show that most people – two thirds to be precise – do NOT want their cash invested in climate change projects as part of a pension scheme. What people want, is a profit that they can live on, rather than the pension benefits package that the government may – or may not – choose to dispense some 20-30 years down the line.
One reason why property prices continue to remain high is that everyone can see that a house in a nice area is a genuinely safe investment. Unlike a lithium battery, solar panel or wind turbine factory. The current fad for all things electric may pass to be replaced by hydrogen vehicles and nuclear power electricity for industry and homes by 2050. That means ESG/climate investments are in reality high risk in terms of potential losses.
In short, the upside of ESG is the social good, the downside is the pensioner literally gets Net Zero.
Just because a particular climate strategy is backed by the world government of Davos and the WEF, doesn’t mean it will generate £1500 a month income in retirement. Insurers and brokers need to be honest about the chances of some climate change investments actually generating a healthy profit long term, otherwise the industry is heading for a mis-selling catastrophe.