More than three-quarters (84 per cent) of pension professionals have expressed strong support for integrating environmental, social, and governance (ESG) factors into scheme investments, despite concerns about the availability of credible data, a Society of Pension Professionals (SPP) poll has revealed.

A live survey taken at a recent SPP event on impact investing found that 84 per cent of attendees believe pension schemes should consider societal and environmental impact alongside financial returns.

Just 9 per cent said they should not, while 7 per cent were unsure.

However, when asked about the biggest barrier to impact investing, nearly a third (32 per cent) of respondents pointed to a lack of credible data.

Governance constraints were also cited by more than a quarter (27 per cent), while reporting fatigue (19 per cent) and concerns about underperformance (19 per cent) followed.

Only 3 per cent saw member or stakeholder opposition as a significant obstacle.

Aon UK head of responsible investment, member of the SPP investment committee and chair of the event, Craig Campbell, said that despite a reported backlash against ESG, the results were "further proof" that the UK pensions industry takes impact investing seriously.

An "impressive" 84 per cent of pension professionals indicated that ESG considerations should be taken into account alongside financial returns, he added.

“There remain barriers to investing, but these are not insurmountable as data on ESG continues to improve, governance constraints are increasingly addressed, and member opposition is evidently limited,” Campbell concluded.

Concerns around the reliability and comparability of ESG data have been a recurring theme across the industry.

Ongoing initiatives aim to tackle the issue, including efforts by the Financial Conduct Authority (FCA) to streamline its sustainability reporting framework, as well as collaborative work through groups such as the Institutional Investors Group on Climate Change (IIGCC) to develop standardised reporting frameworks.

Meanwhile, LCP has urged the government to ensure that any climate-related transition reporting requirements are clear, concise, and relevant for pension schemes, and that they encourage actions that are expected to translate into real-world reductions in climate risk.

Despite recent debate on the topic, the SPP stated that its findings highlighted both the industry’s commitment to ESG and the importance of overcoming persistent challenges related to data and governance, ensuring schemes can deliver long-term, sustainable investment outcomes.

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