Employer ESG knowledge lacking despite 'sizeable' employee demand

Nearly a quarter (24 per cent) of employees cite support for sustainable personal finances, including green pensions, as one of the top four benefits they expect from a new employer, yet employer knowledge remains limited, according to research from Scottish Widows.

The survey found that the majority (83 per cent) of employees view climate change as an important issue and expect their employer to take an active stance on ESG issues and implement sustainable workplace practices.

In particular, 72 per cent of workers felt it was important that their employer invest their savings sustainably.

Based on the findings, Scottish Widows suggested that the provision of greener pensions may be a new way for employers to attract and retain talent, particularly with 32 per cent of respondents seeking new employment, and a further 24 per cent planning to apply to new jobs in a next year.

However, despite the "sizeable employee demand", over a third (34 per cent) of employers admitted that they don’t currently offer a sustainable pension scheme to their employees.

In addition to this, Scottish Widows found that only 25 per cent of employers claim to be knowledgeable about green pensions, while more than a third (37 per cent) claim to not know anything about them or have never heard of them.

Nearly half of employers (43 per cent) identified a green pension as a fund that avoids investments in highly polluting industries, such as oil or thermal coal projects, yet only a 22 per cent acknowledged the social and governance outcomes.

Scottish Widows raised the findings as evidence that there is a "significant commitment gap" on implementing workplace policies that positively impact environmental, social and government (ESG) issues.

This is also in line with previous research from Scottish Widows and Make My Money Matter, which suggested that corporate climate efforts are being undermined by pension investments.

Commenting on the findings, Scottish Widows head of responsible investment, Maria Nazarova-Doyle, said: “Today’s workers expect employers to show true leadership and offer pensions which are invested responsibly.

“Demonstrating a genuine commitment to ESG priorities is not only the right thing to do for the planet, it could also be a game changer for attracting and retaining the best talent. Business leaders have a real opportunity to show staff that they are serious about doing the right thing.”

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