Almost half (48 per cent) of savers are unaware that there are ways to ensure their pension is environmentally friendly, whilst one in 10 are unaware they have any options to manage at all, according to analysis by Scottish Widows.

The research revealed that despite more than a third (36 per cent) of people saying that having options to invest their pension only in sustainable companies matters to them, more than two-thirds (68 per cent) do not know how sustainable their pension is.

Furthermore, just 13 per cent thought it was easy to make sure their pension is environmentally friendly, whilst two-thirds (65 per cent) stated they do not actively make choices about where their pension is invested.

Scottish Widows argued that considering the findings, making sustainable funds clearer and more accessible will benefit not only the environment, but also people’s financial future.

Indeed, over half (56 per cent) of respondents stated that a fund themed around clean energy and low carbon-transition would make them more interested, whilst 54 per cent said the same of a zero-plastic fund.

In addition to this, nearly two-thirds (61 per cent) said it was important to have clearly branded fund options which allow them to invest only in environmentally and socially responsible companies.

The company argued that easier responsible investing could have "an even bigger impact" amongst younger savers, with two-thirds (67 per cent) of 18-34 year olds stating they would invest their money in a fund focused on clean energy.

Scottish Widows head of responsible investment, Maria Nazarova-Doyle, commented: “We are very aware of how environmental, social and governance factors – including a company’s exposure to climate change – can pose investment risks, and why responsible investments can be better for customer returns as well as the planet.

“They can also be attractive to savers who may not have considered how their pension is invested. If sustainable funds can encourage more people to engage with their retirement saving, then we need to find more simple and effective ways to bridge the knowledge gap to help people align their saving with their values.

“This is the next big mission for the industry and we are working hard to make responsible investing clearer and more personalised than ever before, having recently launched our new Responsible Investment and Stewardship Framework and invested £2bn in BlackRock’s new Climate Transition World Equity Fund.”

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