6th January 2020
SUSTAINABLE INVESTMENT – SURVEY RESULTS AND NEXT STEPS
The Trustees recently asked active members of the GSK Pension Plan to complete a survey on ‘Sustainable Investment’, to help them understand member views on the topic. A relatively small population of the overall active membership responded to this survey (104 of 10,509 active members) and so whilst the results provide some idea of members’ current views, they are not necessarily indicative of the entire population, but did provide some helpful themes which the Trustees will continue to build on in future surveys.
Summary of survey results
Members are generally interested in Sustainable Investment and would like to know more. Some members indicated that they would allocate a proportion of their pension pot into a Sustainable Investment fund, with the majority only willing to do so at no additional cost to themselves. A summary of the results that highlight the key themes are:
62% – have heard of Sustainable Investment
12% – currently or have previously invested in sustainable investment funds
48% – would invest in a sustainable investment fund if it were made available, with the majority willing to do so at an additional cost.
The Trustee notes the feedback and would like to thank the members that contributed, and they will continue to seek member views on this important topic. The Trustee is monitoring the emerging experience of the sustainable investment funds currently available in the market, to determine which may be suitable for long-term investment, taking into account the interests of the scheme membership as a whole.
What is Sustainable Investment?
Sustainable Investment is a way to invest to meet the need of the current generation without compromising the ability of future generations to meet their own needs. This method of investing typically incorporates consideration of environmental, social and corporate governance (‘ESG’) issues and broader systemic issues such as climate change, sustainable development and active ownership principles (stewardship).
Three main ways to invest sustainably are:
Exclusion – Exclude companies and industries that don’t reflect your values from your portfolio.
Integration – Integrate environmental, social and corporate governance (ESG) factors into your portfolio to improve your returns and reduce your risk.
Impact – Invest with the intention to generate measurable environmental and soc
Environmental Social and Corporate Governance (ESG) issues such as climate change and the transition to a low-carbon economy can have an impact on investments. Funds with an ESG focus aim to reduce ESG risks by decreasing investments in companies with a worse than average ESG profile (for example, companies with very high carbon emissions). The funds also aim to increase exposure to companies with a favourable ESG profile (for example, companies successfully generating income from low-carbon goods and services).
ESG fund managers engage with the companies they invest in to address a range of themes that could impact their performance over time. Companies which fail to demonstrate their commitment to transition successfully in a low-carbon world may be excluded from an ESG fund.
Fund choices for active members
Whilst there are currently no ESG fund options in the GSK Pension Plan, active members have the following funds available to them through the Legal & General Self Investment Pensions Plan (L&G SIPP), which have a focus on Sustainable Investment:
L&G PMC Future World Fund G25
L&G PMC Future World Multi Asset Fund 25
Active members are able to invest their matching and additional voluntary contributions with the L&G SIPP however, core contributions must be paid into the GSK Pension Plan.More information about these funds can be found here.
We also publish fund fact sheet on GSK Connect that provides the details of the L&G fund performance in the last quarter.