Pension schemes encouraged to invest in green tech: The government has outlined measures aimed at encouraging pension schemes to invest in a more diverse range of long term assets, including green infrastructure and technology.
A consultation has been launched and views are being sought on additional steps to encourage the consolidation of smaller pension schemes into larger schemes.
A key wider benefit of an increase in consolidation could be the increased share of assets saved in large, defined contribution (DC) schemes which are potentially able to direct funds towards longer-term, illiquid investments, the government believes.
This could mean that key and potentially strategically important sectors of the economy receive more investment flows than previously, such as smaller innovative firms, housing, infrastructure and green infrastructure, which can have wide-ranging impacts across society.
Trustees will not be required to report on percentage holdings invested in a “green” or “climate-friendly” way – only that they take account of the opportunities and risks these factors present.
Minister for Pensions and Financial Inclusion, Guy Opperman said: “We want all pension scheme members to benefit from efficient administration, first-class investment governance and access to diversified investment strategies.
“The UK has a world-class occupational pension system. We want to encourage scale and innovation by pension schemes and help drive new investment in important sectors of the economy as we build back better.
“The UK is committed to leading the way in the provision of green technology and infrastructure and we want pension funds to be at the forefront of taking advantage of these long term opportunities.”
The 30th October 2020 is the closing date for the consultation.
Pension schemes encouraged to invest in green tech