Most investors prefer returns over virtuous savings products

THE majority of people prioritise returns on savings over green or ethical investments, research has found as a think tank warns against using pensions to fund sustainable energy projects.

Just a fifth of working adults think their pension funds should prioritise investing in companies that are in line with their social, moral or ethical values, while 82 per cent believe return on investment is the most important fac- tor, according to a report.

The report, commissioned by the Centre for Progressive Policy, showed of the 31 per cent who prioritised investing for a moral purpose, the “vast majority” said they only considered it if returns increased or stayed the same.

The report said: “The picture is consistent regardless of age – younger age groups who are often touted as more socially conscious also put returns first. The public are clear – making a return on their hard-earned savings is the number one priority.”

The findings come as financial services firms increasingly attempt to burnish their ethical credentials by selling products that they claim are environmentally friendly and ethical.

Tariq Fancy, Blackrock’s chief investment officer for sustainable finance until 2019, said the private sector had found ways to convince the public it can help solve the climate crisis, despite its products having “little to no” impact on the environment.

The report’s authors said that when Russia invaded Ukraine, pension savers “frantically” contacted providers to see if they have Russian investments.

“It has been argued that this signals how much people now care about the morality or social purpose of their investments,” the report said. “But this misses a basic point – investing in Russia is not just immoral, it is a bad bet as its economy tanks in the face of devastating Western sanctions.”

The report, which will be published next week, found ministers have been pushing to get typically conservative pension funds to invest in domestic infrastructure and green energy infrastructure. “The Government’s intention to use pension savings to level up risks the retirement incomes of savers,” its authors said.