In the Nordics, most pension funds have guidelines or policies on how to invest their members savings in a responsible manner, however, less than half of the pension savers are aware of the responsible investment efforts.
AMWatch’s survey shows that 55.8 percent of pension savers don’t know whether responsibility is taken into account in their pension scheme.
Responsible investment is a theme that has been on the agenda of pension funds in the Nordics for several years. According to principal at the asset management consulting firm Kirstein, Casper Hammerich, responsibility has become a more integrated part of the pension funds investment policy and particularly negative screening lists have become "the new normal" of listed investments.
Also on alternatives investments, projects in renewable energy as well as properties with energy certificates are seen as responsible, and, therefore, they are increasingly filling the pension funds' portfolios.
“Pension funds have for several years used negative screening lists on listed equities. However, we see a tendency where some of the more sophisticated investors are gradually moving towards corporate engagements and generally take a more active or positive attitude towards their investments, "he says.
The system is built on trust
Even though the pension savers have low knowledge of pension funds' responsible investment policies, senior vice president at the Danish lobby organization for Insurance & Pension Denmark (Forsikring & Pension), Karsten Beltoft, believes that the industry does much to create visibility on the impact of their investments, however, expectations are growing rapidly.
“I think most pension funds are considering what media and what platforms they want to use to communicate about the responsible investment policies or guidelines, however, communication is an area can always be improved on. Going forward, the expectations will probably be even more transparency and information even though I actually think that the companies are doing a lot in this area.”
By the end of 2017, Sampenion, a Danish pension fund for approximately 300,000 savers, examined their customers’ opinion on responsible investments. The analysis showed that only 4 percent had read Sampension's policy on responsible investments.
"On the other hand, 85 percent responded that they expect their pension funds to be invested responsibly, so the area is highly based on trust, as very few people examine the policy even though it’s important to them, says Søren Espersen, head of communications and HR at Sampension.
According to Kirstein's Casper Hammerich, the savers’ strong confidence in the market is due to the Nordic region having a particularly well-developed pension system, which offers opportunities for playing on the entire playing field relative to new investments.
“In this way, you invest in a healthy manner, and, you are, as a Dane, comfortable by having your savings managed by your pension fund – whether in company X, Y or Z, “ he says.
Professor: low knowledge about RI is a natural consequence
According to Carsten Tanggaard, Chairman of the Governmental Money and Pension Panel (Penge & Pensionspanelet) and Professor of Finance at Aarhus University, the low level of knowledge of the pension scheme's responsibility policy is a natural consequence of pension being an area of low interest:
"And, therefore, it becomes a bit coincidental whether savers know their pension fund's policy for responsible investments. I'm not sure that pension funds should do more to inform about their politicians because what is ethically correct to invest in is individual perceived,” he explains and elaborates:
"I would be worried if you should continuously consider what one's pension funds may or may not be invested in because it would be costly to make personalized solutions and it would be difficult to figure out what it would cost in both returns and costs, "he says.
English Edit: Marie Honoré