UKSIF response: Pensions Investment Review call for evidence
We are very pleased to respond to the Pensions Investment Review: Call for Evidence, and alongside our members – which include 300+ financial institutions, pension funds and investors collectively managing over £19trn in global assets under management – we are supportive of the review’s main objectives to deliver sustainable returns for pension savers and increase investment opportunities in the wider economy.
In our view, we believe there are considerable opportunities for UK pension schemes to play a more prominent part in supporting green growth in the economy and the UK’s transition towards a more sustainable future, with investment opportunities arising from this that are closely aligned with schemes and savers’ best interests. For example, we know that around £50-60bn each year will be necessary through the late 2020s and into the 2030s to decarbonise the UK’s economy, and some of this will need to come through the UK’s large pools of pension assets, whose potential here and across the economy at large remains untapped.
However, much more work is still needed to support an investible project pipeline, which will require wider efforts to tackle the systemic barriers holding back investments in the UK’s economy, including in green projects and infrastructure. These barriers include: planning and permitting rules for many projects, grid connectivity, alongside skills and productivity. We strongly believe that these core systemic investment barriers should be considered far more closely by the pensions investment review during this first phase of the review, which – if effectively addressed alongside our industry – could go some way to unlocking pension scheme capital into the economy.
Alongside this, we firmly believe that sustainability factors – including not only climate change but also nature and wider material sustainability factors – should be placed at the heart of this review, with for example active consideration of evolving sustainability risks well-placed to help preserve the long-term value of savers’ pension pots.
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