<article data-sf-ec-immutable=""><section><p><br></p></section></article><section><section><article data-sf-ec-immutable=""><section><p> </p><p>Pensions analysis: Over the past few years, climate change—as a threat to business sustainability—has become one of the main concerns of the investment community. Caroline Escott, policy lead of investment and stewardship at the Pensions and Lifetime Savings Association (PLSA), discusses the threat posed by climate change exclusively in relation to pensions funds.</p></section></article><section><section><h2><mark id="CITEID_719652"></mark>Original news</h2><p>Pensions minister announces climate change action, <a href="https://www.lexisnexis.com/uk/lexispsl/environment/docfromresult/D-WA-A-BBVA-AUUU-MsSWYWC-UUW-UZEYAAUUW-U-U-U-U-U-U-ACDUYEWCDY-ACZYVDBBDY-AEZZWWYVZ-U-U/1/linkHandler.faces?psldocinfo=Investing_in_the_future_what_role_do_pension_funds_play_in_mitigating_climate_change_&ps=null&bct=A&homeCsi=412012&A=0.5484228188328675&urlEnc=ISO-8859-1&&remotekey1=DIGEST-CITATION(LNB%20News%2004/07/2019%2032)&remotekey2=All%20Subscribed%20Current%20Awareness%20Sources&dpsi=0S4D&cmd=f:exp&service=QUERY&origdpsi=0S4D" title="References to">LNB News 04/07/2019 32</a></p><p><i>Guy Opperman MP, Minister for Pen</i><i style="background-color:initial;font-size:inherit;">sions and Financial Inclusion, has announced a new working group to guide pension schemes in climate risk assessment. The group, run together with The Pension Regulator, will combine the knowledge of practitioners and policy makers in the field to provide recommendations for pension schemes.</i></p></section></section></section><section><h2><mark id="CITEID_719653"></mark>With the increasing relevance of environmental, social and governance (ESG) factors in investing more generally over the past couple of years, what would you say is the role of UK pension funds—as opposed to say large asset managers—in helping tackle climate change?</h2><p>The PLSA welcomes the increased policymaker and industry focus on ESG investing. Pension funds are long-term investors, ideally placed to invest in a long term way. This means taking account of all long-term financially material risks and opportunities, including those posed by climate change and company activities aimed at mitigating its impact.</p><p>This will be the case for both Defined Benefit (DB) and Defined Contribution (DC) pension funds. Of course, given that there are more younger people in DC than in DB schemes, DC funds have even longer investment time horizons and so should be looking to assess the impact of climate change across both their default strategies and their self-select options. There is also evidence to show that younger generations care more about investing in line with their own values. ShareAction’s <a data-sf-ec-immutable="" href="http://shareaction.org/wp-content/uploads/2018/03/NextGenerationPensions.pdf" target="_blank" title="Opens in a new window">Pensions for the Next Generation report</a> found that 68% of 25–34 year olds say it is important that people use their money for the good of society and the wider world. As schemes look to engage members more, talking about stewardship of assets and climate issues could help make pension savings and investments more real and encourage further member engagement with their savings more generally.</p></section><section><h2><mark id="CITEID_719654"></mark>What are the main tactics pension funds can use to incentivise the companies in which they invest to address the threat posed by climate change? How effective are these tactics?</h2><p>Pension schemes, as the end investor, can wield significant influence on investee company behaviour and there are a number of different tools which schemes can use. Although many schemes ou</p></section></section>
Source: LexisNexis Purpose Built
Investing in the future—what role do pension funds play in mitigating climate change?
