EA invests pensions in sustainability for a less risky future
The Environment Agency has appointed six new financial firms to manage its £1.1 billion pensions pot following a period of disappointing returns.
Under its new investment strategy the agency is cutting back on its British holdings from 50% to 31.5%, it argues to reduce the risk of investment in a small number of large companies.
It is also upping its investment in specialised environmental equities by 5% to 7%.
Howard Pearce, the EA’s head of environmental finance and pension funds management, said all companies the agency invested in had to meet certain environmental and social criteria but 7% of the fund had been allocated to a specialised environmentally-sound investment programme with financial management firm Sarasin Chiswell.
He said the Government-funded agency’s eco-friendly stance on its pensions fund was driven by sound business sense, not ethics, and investing in sustainable companies meant a less risky future as it would reduce problems stemming from industry’s impact on the environment.
“We’re not saying we wouldn’t invest in arms dealers or drugs,” he said.
“We’re not screening out any company, we’re saying let’s be aware of environmental risks and do what we can to reduce them.”
“We’re not doing it for ethical reasons, we’re doing it for sound investment reasons.
“It’s because we want to avert any risks caused by things like climate change that could affect our returns.”
by Sam Bond