Europe’s Pension Funds Still Don’t Know How to Treat a Key Risk
- Fiduciary duties mean pensions direct less money to ESG funds
- Asset managers are being forced to adjust to stricter rules
For pension funds, the question of how much emphasis to place on client returns versus saving the planet has yet to be clarified.
Photographer: Gerard Julien/AFP/Getty Images
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The main organization representing European pension funds says it’s still not clear how the industry should balance financial returns against a desire to do more environmental and social investing.
The lack of clarity means pension investors representing about $5 trillion may be putting less cash than they otherwise might into sustainable assets. That’s as the need for a decisive reallocation of capital toward planet-saving goals grows more urgent as global warming becomes increasingly deadly.