Beliefs
Establishing beliefs is typically the first step and guides the actions the scheme takes subsequently. It is therefore encouraging to see more schemes progressing along the path to better sustainable investment integration.
UK pension schemes’ ESG report
Pension schemes role in the UK’s drive to net zero and other sustainable investment goals continues.
Our taking action - UK pension schemes’ sustainable investment journey report is based on data generated by our RITE (Responsible Investment Total Evaluation) assessment of over 1,000 UK pension schemes which account for £400bn of assets and over 3m members.
The report shows that many schemes have made significant progress on integrating sustainability into their investment strategies. On average, overall scores for both defined benefit (DB) and defined contribution (DC) schemes have increased, with schemes ranked A or better having more than doubled to 13%.
RITE scores pension schemes according to how well sustainable investment is integrated into each aspect of Mercer’s Sustainable Investment Pathway: beliefs, policy, process and portfolio. Here are some of our key findings:
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Policies
Our 2022 report found a disconnect between companies’ often-ambitious sustainability policies and those of their pension schemes. Schemes and companies are starting to close this gap to protect their reputations and, for DC schemes, target improved member outcomes.
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Processes
Schemes are now implementing their policies by updating and improving processes. This progress has been partly driven by larger schemes implementing and preparing for Task Force on Climate-Related Financial Disclosures (TCFD) compliance.
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Portfolio
Schemes are increasingly including a sustainable fund in their portfolio. This is good news but more schemes need to make this intervention to align their investments with their beliefs and policies.
Read our 2023 RITE report.
Our latest RITE report details the improvements in sustainable investment integration schemes have made over the past 12 months.
If you have any questions about this report, or would like to know how well your scheme is integrating sustainable investing into its investment strategy, please contact us.
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Download Mercer’s Time for Action: UK Pension Schemes’ Journey report to find out about the role of responsible investment in UK schemes and discover how to break down the ESG journey into four steps.
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