Investment preferences of pension fund members in Switzerland
When questioned about their specific investment preferences for their own pension assets and a sustainable investment strategy, the study respondents named specific sectors and topics.
According to the survey, an investment fund should invest in companies that offer solutions to global challenges such as:
- Water scarcity (75% of respondents would like to see investments made in this topic)
- Food scarcity (74%)
- Energy shortages (69%)
- Availability of raw materials (63%)
By contrast, pension fund members were of the view that no investments should be made in the following states, sectors and companies:
- states that violate human rights (86% of the respondents oppose investments in such states)
- generally controversial sectors (85%)
- companies that disregard worker safety (84%)
- companies that disregard environmental protection guidelines (83%)
- companies that disregard guidelines relating to shareholder and ownership rights (76%)
82% of respondents are moreover of the view that pension funds also fulfil their social responsibilities by taking the above-specified investment strategies into account.
It is essentially the case that the Swiss population supports ESG factors. However, integration of these factors in the investment process is not important to everyone to the same extent. Around one third (27%) of respondents support ESG factors only if they do not have a negative impact on their returns.
However, 40% of all respondents are prepared to forego a part of their returns if in return ESG factors are made part of the investment process. One fifth would even relinquish half or more of their returns, while a further 15% of all respondents would be willing to accept a yield reduction of up to half if ESG factors were made part of the investment process.
In short, it is important to note that making ESG factors part of the investment process enjoys considerable support throughout the entire Swiss population, and that this is explicitly opposed by only a very small percentage.
This now raises the question of what value the Swiss population places on making environmental, social and governance aspects part of the investment process.
In overall terms, ESG factors in pension fund investment processes are strongly welcomed in Switzerland. When specifically asked about this topic, it was apparent that this was important to respondents, while only a small number expressed opposition. However, when asked open questions without reference to ESG factors, only a very few aspects were cited in this direction.
This shows that the topic is masked by concerns about financial security and pension protection. In order to win the hearts and minds of the sceptics in the Swiss population for the integration of ESG factors in pension fund investment processes, it will be necessary to refute the argument that a sustainable strategy has a negative impact on yields.