The main organization representing European pension funds, Pensionseurope, said he still does not know how to find a balance between profitability and desire to invest more in projects that support the environment and society, Bloomberg writes. We are talking about the organizations that dispose of about five trillion dollars.
Still, in which pension funds entered, it means that they may decide to invest in this sphere less than they could. At the same time, the need to actively allocate funds for projects that will help save the planet, is becoming increasingly acute against the background of global warming.
So far, pension funds, as the Secretary General Pensionseurope Matti Leppala emphasized, is obliged to act in the long-term interests of their members. “This is a legal obligation. Will the maximum desire for the implementation of ESG-goals contradict the goals of fiduciars, it is very difficult to say,” he noted. The European Commission, according to Leppaly, will ask the European regulator responsible for the pension sphere, to explore the question of how the funds are better interpreted by their obligations in 2022.
The current decision on ESG risks is that there are those related to the environment, social responsibility, corporate governance – will determine the future of the industry. At the same time, this year, European funds that are engaged in the sector of ethical financing achieved a return of 14 percent of investments, which is approximately 4 percent less than the growth of the largest enterprises in the Stoxx Europe 600 region. The yield of ESG funds in the USA and Japan is also less than an increase in Relevant stock exchanges in these countries. However, the flow of investments in ESG assets is growing, by 2025 the market should exceed 50 trillion dollars, that is, to make up about a third of the total assets running.
At the same time, pension funds in the United States, as Bloomberg found out, is still actively investing in projects that harm the planet. Ten largest organizations in the country remain significant investors in large corporations that make the most significant contribution to environmental pollution, despite their environmental rhetoric.