Efforts to drive equality, diversity and inclusion (EDI) could be undermined by deficient data, despite an increasing majority of UK pension schemes and trustee firms embracing EDI in their business strategy, research commissioned by Cardano has revealed.

The annual research found that nearly half (46 per cent) of UK pension schemes and professional trustee firms have now implemented EDI strategies, marking a substantial rise from the 26 per cent recorded in 2022.

In addition to this, a further 28 per cent of schemes and professional trustee firms have established specific EDI targets, which was again a significant increase from the 11 per cent reported in 2022.

There was also growing appreciation of the potential benefits when embracing EDI, as 60 per cent believed endorsing EDI leads to better governance and decision-making, while almost two thirds (62 per cent) see it as a means to broaden skillsets.

The results also showed increasing engagement with sponsors in this area, as 50 per cent of defined contribution (DC) schemes and 50 per cent of trustee services firms demonstrated greater proactivity in discussing EDI with sponsors.

Trustees' EDI expectations for providers have also risen, as 43 per cent of DC schemes report they would refrain from giving a mandate to a provider which fails to meet their EDI standards, while 50 per cent of professional trustee firms said they would consider requesting a change to the composition of a provider’s team if they failed to meet their EDI standards.

Improvements have already been seen in some areas, such as social and gender inclusivity, as the research found that those who attended state schools are well represented on the majority of trustee boards, while 21 per cent of respondents work at schemes where at least 40 per cent of board members are women, up from 17% in 2022.

However, Cardano argued that greater efforts are needed attract a more diverse range of talent, especially from underrepresented groups such as neurodiverse individuals, minority ethnic backgrounds, or people with disabilities.

Indeed, despite the positive progress, Cardano head of trustee engagement, Gillie Tomlinson, warned that there remains a substantial and persistent EDI gap that requires attention, with significant barriers to effective implementation of EDI strategies.

Recruitment was the most common challenge, according to the survey, with nearly half (46 per cent) of pension professionals citing the failure to attract diverse talent as a primary barrier to improving EDI.

In addition to this, the research found that the absence of comprehensive diversity data also poses a significant risk to the effective measurement of EDI and progress of initiatives across the pensions industry.

According to the survey, more than one in three (34 per cent) pension schemes do not collect any diversity data on members at all.

Among those that do, the focus is often limited to basic characteristics such as age (59 per cent), gender (43 per cent), and marriage or civil partnership status (42 per cent). This data deficit extends to PT firms, where less than half (36 per cent) collect EDI board statistics.

Commenting on the findings, Tomlinson said: “TPR’s helpful guidance launched last year sets out several alternative approaches schemes can adopt, like staggering the turnover of roles. Incorporating measures such as knowledge transfer, mentorship programmes and career development pathways can also help bring about a more inclusive pension landscape.

“It is also essential to recognise that effective management hinges on accurate measurement. TPR’s survey last year was a crucial exercise to help the industry have a better understanding of trustee diversity.

“However, collectively across the industry we need to collate more precise data to monitor the progress and effectiveness of our EDI efforts. Progress has been made, but we cannot afford to lose momentum."

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