Pension savers given a voice on ESG issues to tackle pension apathy

New research by Aviva, finds that almost two-thirds of consumers (63 per cent) who have savings, investments, a pension, or an annuity, want pension companies to be more environmentally transparent in where they invest their pensions. 

Almost one in five (18 per cent) placed highest importance on financial services companies ensuring their investments have a positive impact on society over the long term. However, over half (55 per cent) of those surveyed didn’t know where their money was invested.

Other research by Aviva shows there has been a clear shift in attitudes over the last four years with fears about climate change having doubled to become the second biggest global concern last year behind, somewhat unsurprisingly, disease and pandemics.

However when speaking to adults with savings, investments, a pension, or an annuity, the majority (71 per cent) agreed that they just want the highest return on their investment. Even among those who hold a responsible investment, two fifths (40 per cent) do so because they believe they will get a better return in the long-run.

Laura Stewart-Smith, Head of Workplace Savings & Retirement at Aviva, says: “We find over 90 per cent 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 is piloting an investor opinion tool with fintech start-up Tumelo and a selection of workplace pension customers. Tumelo’s platform helps individual pension members to see which companies their pension is invested into and to have a voice on the environmental, social and governance (ESG) issues these companies are facing.

A selection of pension savers whose workplace pension scheme is with Aviva have the option to voice their opinion on issues such as climate change, gender equality, human rights, chemical pollution, and political lobbying ahead of the companies’ Annual General Meetings (AGMs). Their opinions are collected through the platform, anonymised, and sent back to the fund manager, which incorporates them into its decision-making framework. The real-world impact is then reported back to members once the AGM has passed.

Laura continued: “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.

“We’re also bringing more funds to members which will give them the power to choose whether they use their savings to drive the transition to a low carbon economy, minimise their investment in polluting industries or help have a positive impact on the planet. And for those who want us to make it even easier for them, we are working towards making our default options Net Zero as well.”

Georgia Stewart, Chief Executive Officer at Tumelo, says: “We are 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. Investing is the most powerful, yet most underappreciated, way for most individuals to have a positive impact on their future. 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.”