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Study suggests Swiss pensions funds could improve on responsible investment

Environmental charity, WWF, together with Responsible Investment (RI) pressure group ShareAction, has carried out the first survey examining the RI approaches of the 20 largest Swiss pension funds. The study analysed how far pension funds invest their beneficiaries’ money sustainably and whether they transparently provide them with information. The survey concluded that the majority of the 20 largest Swiss pension funds do not yet systematically consider sustainability criteria, such as climate change, in their investment decisions.

All 16 of the pension funds that participated in the survey do consider RI, and 13 of those funds also have a relevant policy. However, WWF and ShareAction said that the survey showed that there is still some way to go before Swiss pension funds exemplify international best practice in RI. For example, only one pension fund has developed a strategy on the financial risks related to climate change.

The report’s authors also conclude that the pension funds should improve the transparency in relation to their actual holdings, so that beneficiaries know how their money is invested and can take action when they disagree. Currently it’s rare to see information published that goes beyond the allocation of assets to different types of investments such as equities or bonds, the report states.

Britta Rendlen, Head of WWF Switzerland’s Department for Sustainable Finance, said, “Pension funds should consider environmental risks in their investment decisions. Responsible Investment is not only important for the environment but is also in the interests of beneficiaries.”

Pension funds in Switzerland manage CHF 767 billion ($804 billion). The 20 largest funds represent around a third of this (CHF 281 billion, $287 billion) and were surveyed in this study. Pension funds are among the largest and most influential investor groups in Switzerland. As long-term shareholders they are able to directly influence the decisions of the companies in which they invest. Pension funds thus are among the key players when it comes to creating a more sustainable economy.

The study by WWF and ShareAction was carried out through desk research, and a questionnaire was sent to the 20 largest pension funds. Pension funds that did not answer the questionnaire were assessed based on publicly available information.

What do you think?