British pension funds are increasingly turning to impact investing | News

UK pension schemes appear to be increasingly considering impact investing, particularly social infrastructure and affordable housing.

According to a survey conducted by Pensions for Purpose and sponsored by Big Society Capital of UK pension funds with total assets under management of around £150 billion (€180 billion), more than 50% of schemes hold a form of impact investing that focuses on positive social actions. or environmental results as well as financial returns.

It also shows that 90% of respondents are looking to make impact investments in the UK. Among the plans that already make impact investments, these represent nearly 5% of their total assets under management.

Social infrastructure – such as hospitals and schools – and social and affordable housing are the most popular social impact investments for these investors, with 78% and 44% investing in these areas, respectively, according to the research.

But when asked which UN Sustainable Development Goals the funds were targeting, those related to the environment were most often cited with a 100% intent to target climate action, he said. declared.

The survey also concluded that greater education is welcomed by plan managers and administrators to improve their awareness of social issues and appropriate impact investment products that help provide solutions to these issues.

Charlotte O’Leary, chief executive of Pensions for Purpose, said: “UK pension funds represent £2.2 billion in assets (according to the ONS 2019 survey) and that will only increase with the future. automatic registration. This represents a significant pool of capital that can be allocated not only to mitigate the risks associated with climate change and social inequality, but also to invest in the solutions to these systemic risks.

She added that impact investing offers the perfect opportunity to review allocations to private markets, recognizing that social impact investing opportunities exist and are being created by pension funds across the UK.

Katie Fulford-Smith, director of investor relations at Big Society Capital, said: “Our investments must help society scale up to enable the green transition – and with pension funds worth a total of 2 £.2 trillion, they have tremendous power to help achieve that.” The market for impact investing, she added, is growing dramatically, having grown almost eightfold from £833m in 2011 to £6.4bn in 2020.

“To meet this demand, we are working to increase the number of social impact investing options and improve understanding of the broad benefits to investor and investor,” said Fulford-Smith. .

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