Demand for sustainable pensions in the UK is increasing, findings from two reports this Good Money Week show, with more employees switching their pensions to sustainable options and considering a company’s pension options when seeking new employment.
Research by Opinium for interactive investor’s (ii) forthcoming Great British Retirement Survey has found 14% of Brits have made the switch to an environmentally and/or socially sustainable pension.
Similarly, research from Scottish Widows has found a quarter of employees wanted green pensions from their employers, with 83% expecting their employer to take an active stance on ESG issues and implement sustainable workplace practices.
“With a third (32%) of workers currently seeking new employment – and a further quarter (24%) planning to apply to new jobs in the next year – the data suggests that the provision of more sustainable pensions may provide a new way for employers to attract and retain talent,” the provider’s Green Pensions Report said.
Maria Nazarova-Doyle, head of responsible investments at Scottish Widows, said: “Today’s workers expect employers to show true leadership and offer pensions that are invested responsibly. Demonstrating a genuine commitment to ESG priorities is not only the right thing to do for the planet, it could also be a game changer for attracting and retaining the best talent. Business leaders have a real opportunity to show staff that they are serious about doing the right thing.”
More awareness needed
However, both reports also highlighted the need for more awareness around ‘greening’ their pensions.
Despite employee demand, Scottish Widows found only a quarter of employers claim to be knowledgeable about green pensions. More than a third (37%) of employers claim to not know anything about them or have never heard of them.
Similarly, ii found 26% of respondents said they were unaware it was possible to switch.
Becky O’Connor, head of pensions and savings at ii, said: “More needs to be done across the UK to increase people’s understanding of their options when it comes to where their pensions are invested.”