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Press Releases - 11/10/2013

DC pension holders seek ethical option as UK ethical investment grows to £12.2 bn

The figure released today by global responsible investment research firm EIRIS, shows that the amount of money invested in the UK’s green and ethical retail funds is now at an all-time high of £12.2billion.

Launched in the run up to the UK’s sixth National Ethical Investment Week (13 – 19 October 2013),  which is aimed at ensuring that everyone is aware that they have green and ethical options when it comes to taking  financial decisions, the latest figure of £12.2 billion* is a dramatic increase from £4 billion in 2001.  Out of around 80 funds that featured in both EIRIS’ 2013 and 2012 estimates, EIRIS estimates that 10 grew by over 50%  from June 2012 to June 2013; 23 grew by 20-50% and 18 grew by over 10% (but under 20%) in the same period.**

Increasing demand

Growing interest in ethical and green finance is supported by the findings of EIRIS’ latest IPSOS MORI national consumer survey which explores attitudes to ethical or green pension options in Great Britain. The poll surveyed 2015 adults.

The poll explored the extent to which people are concerned about whether the companies in which their pension fund invests abide by certain global conventions and principles. The results reveal a desire that pension funds and their investment managers inform individual adults about the extent of their compliance with global conventions and principles.  A significant number of adults would be motivated by green or ethical concerns to switch pension funds.

Key findings:

  • 65% of adults felt that it was either essential or very important that a pension scheme invests in companies that act in line with conventions and principles that prevent child labour; 65% felt the same on preventing forced labour; 55% on respecting workers’ rights; 54% on protecting human rights, and 46% on safeguarding the environment.
  • 10% of adults would like to be informed of how far a pension fund complies with global conventions and principles when selecting a fund for the first time; 43% would like to be informed annually of how their funds implement these in their investments; 18% would like to be informed every six months and 18% would like to be informed quarterly.
  • The poll found that nearly a fifth (18%) of adults would like to see 100% of their pension scheme invested in a fund that avoids anything where there may be a negative environmental, social or governance (ESG) impact.  15% of people would like to see up to a quarter % of their pension scheme invested in a fund that avoids anything where there may be such an impact.
  • Close to one in five (19%)  of respondents would either be very or fairly interested in switching the standard default pension offered by their employer to a green and ethical product even if its financial performance rates and benefits were slightly less than other similar pension funds without an ethical or green focus. 45% would be either very or fairly interested in switching if the financial performance rates and benefits of the ethical or green fund were as good as other pension funds without such a focus.

“We continue to see an increase in the amount of money being invested in green and ethical funds, reflecting the wider interest of consumers in being ethical and sustainable in their purchasing decisions. And, not surprisingly, they want their pension funds to address environmental and social factors as well. So this provides a challenge and an opportunity for providers of DC pension providers. It’s also encouraging that individuals are keen to see their pension providers be transparent about how they ensure their underlying investments follow best practice.” said Stephen Hine, Head of Responsible Investment Development, EIRIS.

 

(Embargoed until 12 October 2013)

 

Press contacts:

Stephen Hine
Head of Responsible Investment Development
Stephen.hine@eiris.org
+44(0)207 840 5722

Notes to editors:

  • (*) As at 30th June 2013 EIRIS estimates that there was approximately £12.2 billion invested in the UK’s green and ethical retail funds. The £12.2 billion figure is an estimate based on funds under management of around 80 UK domiciled green and ethical retail funds. It does not include UK money invested in ethical funds domiciled outside of the UK or in off-shore funds. This estimate is based on information available to EIRIS in October 2013. (**) EIRIS’ analysis of growth of individual funds is our best estimates based on our estimated figures for June 2012 and 2013. Click here to view more statistics on the UK green and ethical retail fund market.
  • The National Online Consumer Survey was conducted by IPSOS MORI on behalf of the social enterprise and responsible investment research firm EIRIS, to gauge attitudes to ethical and green pension options amongst the British public. A sample of 2015 British adults between 16 and 75 years responded to the online survey, across England, Scotland and Wales. Fieldwork was conducted using an online method, and took place between 5 and 6 October 2013. Data has been weighted to known population figures for Great Britain. 28% of those surveyed had a final or average salary scheme. 21% of those surveyed had a defined contribution scheme. 18% of those surveyed had a private pension set up independently from their employer.
  • National Ethical Investment Week (neiw.org) is a national campaign which runs from 13 – 19 October 2013 and aims to ensure everyone knows that they have green and ethical options when it comes to their financial decisions. National Ethical Investment Week brings together Advisers, Charities and Churches, Financial Organisations, Faith Groups, NGOs and Community Groups to raise awareness of green and ethical investing.
  • yourethicalmoney.org is a free, online, independent resource for consumers beginning to explore green and ethical finance. The resource addresses green and ethical concerns related to areas of finance including banking, investments, insurance and credit cards. Users can search for their bank or building society, as well as their insurance, credit card or mortgage provider, to find out how it measures up against a set of specially developed green and ethical criteria. Users can also search for investment products that match their green and ethical concerns. The site features guides on financial exclusion and green wash in financial product marketing.
  • EIRIS is a leading global provider of independent responsible investment research. EIRIS’ responsible investment services are used by more than 200 asset owners, asset managers, banks, stock brokers, governments and charities from across Europe, North America, Australia and Asia. We work with major index providers around the world including the Johannesburg Stock Exchange and Mexican Stock Exchange.   Our sector-based research teams provide in-depth coverage of around 3,500 companies globally, covering over 110 different environment, social and governance areas. In addition to our offices in London, Paris, Boston and Washington, D.C., our global network of partners enables us to further extend our research coverage. The EIRIS global platform includes partners in Australia, France, Israel, Germany, Mexico, Spain, South Africa and South Korea.

 

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Keywords : ESG, United Kingdom