Employees want responsibly invested pensions

Eva Cairns on the findings of our recently published Responsibly Invested Pensions report.

Our 2025 Responsibly Invested Pensions report (PDF, 2MB) surveyed more than 6,000 employees, employers and advisers and, despite recent headlines about companies rolling back on diversity, equity and inclusion, and scepticism about climate change and net zero, it’s clear that these issues still matter to many people.  

Alongside worries about the cost of living, the biggest societal concern highlighted by respondents, our survey showed that pension savers are concerned about climate change, environmental issues such as deforestation and pollution, as well as social inequality.  

For example, almost half of respondents said that climate change was one of the biggest issues facing society both now and in five years’ time. It was also interesting to see that social issues mattered more to younger respondents.

“There are positive signs that people are realising that choosing how their pension is invested can be part of creating a more sustainable world to retire into – and help build more resilient pension pots.”

Eva Cairns, Head of Responsible Investment 

We explored employees’ expectations of their employers, given the important role employers play in offering a pension that meets their employees’ needs and objectives. Some 80% of respondents stated that an employer’s social responsibility credentials or benefits were key factors in them choosing their current role, and this was even higher among the younger generation. Employees also have clear expectations of their employers when it comes to corporate sustainability commitments, with the Living Wage, diversity, equity and inclusion, net zero and waste management being key areas.  

It's perhaps unsurprising given employees’ clear social and environmental awareness, that 72% of respondents also expect their employer to provide responsibly invested pensions.  

And employers are clearly listening, with more than two-thirds of companies we surveyed offering a responsibly invested pension as an option, although this does differ depending on the size of the company. For more than half though, this isn’t offered as the default, which means that employees have to make an active decision to invest responsibly – and 61% of employees say that they wouldn’t know how to do that. 

Embedding responsible investment approaches within the default pension offering, as we have with our recently launched Scottish Widows Lifetime Investment proposition, is one way to tackle that. Engaging with employers, advisers and – both through them and directly – with employees is also important to share information and insight. Investment knowledge and attitudes to investing are linked, and education and confidence are cornerstones of that.  

There are positive signs that people are realising that choosing how their pension is invested can be part of creating a more sustainable world to retire into – and help build more resilient pension pots. But almost half of employees surveyed were unsure about whether their pension was invested responsibly or not. 

It was reassuring to see that the majority of employers (81%) feel equipped to provide effective guidance on responsibly invested pensions, although again this differed depending on the size of the company with large companies feeling more confident in that regard.  

Which is why our commitment to supporting employers, advisers and employees can really make a difference. By listening to what they need, and by ensuring that responsible investing is fitted as standard in our propositions, we can leverage the potential for responsibly invested pensions to deliver more resilient returns and, at the same time, make a difference to people and planet. 

To find out more, take a look at our 2025 Responsibly Invested Pensions report (PDF, 2MB).