Pension funds can influence a major shift in ESG investing

Year after year, parties to the UN Climate Change Conference make pledges to mend their ways in key focus areas such as carbon emissions. The centrality of finance as the catalyst for change in climate matters has been reiterated. As such, pension funds can loop in to make a change and simultaneously derive satisfactory value for their members.

Possibly the largest mobiliser of private finance globally, pension funds are a potential superpower in the climate change battle. With Kenya’s assets under management approaching the Sh1.5 trillion mark, pension funds make the largest institutional investors with substantial long-term interests — enough to influence significant shifts in Environmental, Social and Governance (ESG) investing. As legislation regarding ESG factors becomes increasingly ambitious, pension fund trustees still have a fiduciary duty to protect the financial interests of their members who rely on them to preserve their retirement savings.