ShareAction recently published a report – The Engagement Deficit – assessing the UK’s largest auto-enrolment pension providers. The report focuses on two key areas, firstly how responsible investment is being considered in default funds, and secondly, the content and quality of communications and engagement with the millions of new UK savers.
These areas were selected as they have so far received little focus during the roll-out of auto-enrolment. The report also provides a series of suggestions and recommendations for the pensions industry, policymakers, and regulators.
In the report, Guy Opperman, Pensions Minister, stated that, according to the government there’ll be few if any instances where Environmental Social Governance (ESG) considerations aren’t financially material in relation to investments.
While it’s a positive thing that most pension providers adopt investment practices that integrate certain ESG factors, the report acknowledges that there’s still room for improvement. This is especially the case when considering the possible impact of robust responsible investment practices on income received from a pension.
According to ShareAction, it’s strongly advisable for all leading pension providers to produce statements of responsible investment principles. Such statements would set out their expectations for all fund managers, whether in-house or external, around responsible investment. This would help ensure that the best interests of savers are being met.
The report offers aggregated performance scores, which allows for a comparison between the results received in this 2018 report and the results from the report ShareAction produced in 2015. While the comparison is indicative only, due to slightly different topics being covered each time, the more recent report demonstrates NEST’s ongoing commitment to responsible investment.
NEST was the clear leader for responsible investment, obtaining a score of 87 per cent – 30 per cent higher than the second placed provider.
NEST is proud of its commitment to being responsible investors in the long-term and pleased it has been recognised and hope that responsible investment issues will continue to gain exposure.
To read the full report and see how NEST compared with other UK pension providers follow this link to the ShareAction report.