87% of DC pension members don’t understand importance of net-zero

Eighty-seven per cent of defined contribution (DC) pension members do not understand the importance of having their pension scheme aligned to a net-zero goal, new research has revealed.

A study by Legal & General Investment Management (LGIM) found that that one in four (25%) DC members has never heard of the term, while a further three in ten (31%) have heard of it but could not say what it means.

However, despite the lack of awareness around the term, LGIM stated that when members were explained the meaning of net zero, an overwhelming majority were in favour of their pension moving in this direction. The findings revealed that 70% of DC members prefer remaining invested and using their collective power to engage with companies to align their businesses with global climate change efforts, or prepare them to thrive in a low-carbon economy.

The study, based on findings from 3,056 adults currently contributing to a workplace pension, also showed that 64% of all members have become more concerned about the impact of human actions on the planet following the COVID-19 crisis.

LGIM co-head of defined contribution, Stuart Murphy, commented: “We have always considered ESG to be a financially material consideration and this research shows that our members agree, with the majority in favour of their pensions moving to net zero.

“It is understandable that members are not fully up to date with the latest trends and terminology, and it is important that we work to further educate, support and empower our member base on the role and impact of their pension savings on society.”

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