Prince of Wales calls on pensions industry to invest responsibly

HRH The Prince of Wales has called on the pensions industry to help tackle the world’s increasing social, environmental and economic risks by investing in corporate and socially-responsible employers.

In a pre-recorded speech played during the opening of the National Association of Pension Funds’ Annual conference and exhibition 2013 on 16 October, the Prince said: “I don’t think you need me to tell you, we live in an increasingly uncertain time.

“We are facing what could be described as a perfect storm. The combination of pollution and over consumption of finite natural resources, the very real and accumulating risk of catastrophic climate change, unprecedented levels of financial indebtedness and a population of seven billion that is rising fast. The world is not even feeding its current population, let alone the nine or 10 billion expected by 2050.

“I argue that, as the largest class of institutional investor, and as a sector that is defined by your long-term liabilities, you have a need, and arguably a duty, to ensure that these emerging environmental, social and economic risks are identified and managed.”

He said there was mounting evidence from Harvard and London business schools that showed that organisations that improved the way they tackled environmental and social challenges were better able to deliver long-term investment returns. “So, [the pensions industry] can have [its] cake and eat it.”

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The Prince added that the way in which pension fund liabilities were being stretched over increasingly more decades as a result of ageing populations meant that the pensions industry needed to rethink its approach to business. “Surely the current focus on quarterly capitalism is becoming increasingly unfit for purpose.”

He added: “Your sector plays a very significant role indeed in how our economic system works, both now and in the future, so it really does fall to you, I’m afraid, to help shape a system designed for the twenty first, and not the nineteenth, century, which is why I can only urge you to deploy your considerable human ingenuity to link that innovative and imaginative leap that the world so badly needs otherwise your grandchildren, and mine for that matter, will be consigned to an exceptionally miserable future.”