Financial plans for retirement should focus on value, not on other factors like impact - discuss

Investing for a healthy and happy retirement, is a long term project. We will probably only see the results of our decisions many years from now.

Do you think that the decisions you take today should solely focus on the risk and returns of an investment, or do you think that your money should be used ‘responsibly’?

Tell us what you think.

Retirement financial plans should …
  • solely consider the risk and returns to the investor
  • consider (and balance) the impact for the investor, society & the environment

0 voters



Recently, in the US, the Department of Labour announced that:

“Private employer-sponsored retirement plans are not vehicles for furthering social goals or policy objectives that are not in the financial interest of the plan,” said Secretary of Labor Eugene Scalia. “Rather, ERISA plans should be managed with unwavering focus on a single, very important social goal: providing for the retirement security of American workers.” - full article

While this specifically affects the US, it points to an important question for our future.

Are our best interests served when we ignore ‘outside factors’ and we focus exclusively on the financial impact of our investments, so we mainly consider the risks and returns of the funds we invest in? After all, this is what the funds were created to do.

Or do we think that our money should be invested in businesses that have been independently assessed for their ‘ESG’ (environmental, social and corporate governance) or SRI (socially responsible investing) credentials? Or even more, in businesses and industries that will have a positive ‘Impact’ on society or the environment?

What if making this choice meant your investments performed slightly worse for you? Is this a price you would be willing to pay?

How important are these choices to you? Or is this a false choice?

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Investing in a socially responsible way, for me, is the most important thing. I’d much rather take smaller returns and contribute to a better future than sacrifice my values in the interest of profits and a larger pension pot.

Otherwise what am I really saving for? A future where profit continues to come before solid social and environmental principles is not one I want to contribute to if I can avoid it.

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It’s a false dichotomy. Ignoring ESG and its ilk risks profit too, as the environment will be the defining issue for the next century at least

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Definitely agree that its worth choosing companies which show they are socially responsible. Although disappointing, I think it is no surprise that big pension managers do not want to focus on this yet.

I hope with changing views on the environment that that won’t be the case for much longer. I think the corporate world is considering social factors more, and so this should pass onto fund managers having to consider it.

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Very disappointing. I try to chose the more ethical/sustainable funds in the areas I invest - I’m aware that as an individual investor you have almost no impact on the fund managers when you choose a 'UK Equity, Ethical" fund over a “UK Equity” fund.

Even the big University scheme (USS) has an ethical statement like the one Robert posted above, essentially saying “our ethical concern is being able to pay our obligations, thus we will invest in anything”.

USS (when I was last briefly in it) was in quite a serious deficit, so this position was understandable if not disappointing - you’d hope that was one sector where the ethics of the investment might be at least a passing consideration…

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