Pension funds must heed climate change: Gore - Yahoo! News
EDINBURGH (Reuters) - Former U.S. vice-president SEARCH
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Speaking at the National Association of Pension Funds (NAPF) investment conference in Edinburgh, Gore urged pension fund managers to look for ways to "systematically integrate" sustainability into their investment-making decisions.
In a keynote address entitled "Global pensions and investment challenges," Gore said a greater emphasis on sustainable practices would boost pension fund returns.
"I believe very deeply that we're now in an era of history that has suddenly rushed upon us, that has some very different characteristics including a number of challenges that we would in the past have associated with very long-term cycles, but are occurring much more quickly than we expected," he said.
"The climate crisis is, in my view, by far the most important of those."
He said, against that backdrop, sustainability factors -- such as the environment, treatment of company employees, community involvement and business ethics -- were the "most distinguishing set of values to determine what firms are going to perform better than others."
The speech comes at a time when pension funds are battling against lower investment returns and soaring life expectancy.
Gore, chairman of a UK-based sustainable investment management company, Generation Investment Management, said the pensions market was suffering from "short-termism" in a bid to chase higher returns.
"Thirty years ago, in my country, the average holding period for equities was seven years and now the average mutual fund turns over 100 percent its portfolio in less than 11 months," he noted.
Gore said research showed that most company pensions had still not conducted a "careful analysis of the assumptions on longevity built into their plans," and that sustainable investing had a "hand and glove linkage with long-term investing."
"If you do truly invest on a long-term basis, then it's easy and more profitable to fully integrate sustainable factors into your analysis," he said.
"We have everything we need to make this transition with the possible exception of the will to act, but the will to act is a renewable resource," he added.
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