The emotional visibility of investments can drive stronger member engagement, according to Schroders CIO of the Climate Plus Fund, Vikram Bhandari.

Speaking in a session at Pensions UK's Annual Conference, Bhandari highlighted the benefits of private market investments in enhancing member engagement.

He explained that one of the “main powers” that come from these types of investments is live, relatable, data, which "means that there are investments people can see, can feel and really be proud of".

Bhandari also stressed that it was “crucial” that people understand that investing for impact or making a difference doesn't mean sacrificing performance.

“In reality, sustainability and positive impact kind of work hand in hand and can actually be a driver of robust long-term returns,” he said.

However, Quietroom chief executive officer, Chloe Taylor, cautioned that “these types of investments alone are not a silver bullet for changing people’s behaviour” and questioned how to shift the mindset from positive intention to action.

She said that Quietroom research has shown that when people understand their pension investments have a positive impact, they care more and engage more.

“When talking about these sorts of investments, particularly when it has a positive impact -whether it's sustainable from a climate perspective or socially with things like building houses and hospitals and infrastructure - people's feelings towards their pension change,” she said.

Taylor added that understanding and being able to see what their pension is invested in makes people want to participate more, as they can see a benefit that's more “present and immediate”, which may also be aligned with their values.

However, Quietroom’s research also revealed a gap between intention and action.

Six out of 10 people said that once they understood these investments and felt good about them, they would contribute more to their pension - yet many fail to follow through.

Taylor explained that this gap often comes down to user experience: “It is going on that app, that website, or trying to dig out that piece of paper in that drawer and do something about it.

"If barriers are present and it’s not easy, straightforward, and confidence-inspiring, people can quickly fall off that journey."

She emphasised the importance of combining technology, user experience and design improvements so that when people see these projects, they can take action easily and confidently.

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