Although most savers say they want to invest their retirement responsibly, very few people who are automatically enrolled in operational systems have switched their investments into sustainable funds.
This, according to a study by Barnett Waddingham, which found that one in five savers (20%) believed that ESG funds should be the standard option for company retirement plans regardless of the rate of return.
Another 26% said it should be as long as the return is consistent with that of a non-ESG fund.
45% of people with a company pension were indifferent, only 9% were of the opinion that the default fund should not be aligned with ESG.
According to the study, 80% of people with a company pension have never made changes to the funds they invest in, and another 11% have made a change only once.
Older members aged 55 and over have a particular tendency to stick with their original fund selection (91%).
18-34 year olds are more likely to review their choices, but still only a third (34%) have ever made changes to their investments.
It is crucial that women (85% compared to 75%) have stayed in their default fund more often than men.
Barnett Waddingham said it was unclear whether members of occupational pension schemes are sticking to default funds because they are unsure how to access their pension or because they are reluctant to adjust fund selection.
However, the company cautioned that sticking to the default setting could potentially leave them in funds that no longer match their risk tolerance and investment preferences, or that are not equipped to make the most of market conditions.
There is currently £ 8 billion invested in company pensions, but unless consumers are more committed to their pensions or the government takes radical action to encourage the use of ESG funds, that money is not being invested responsibly.
Barnett Waddingham Policy and Strategy Lead Amanda Latham said: “The UK is grappling with a dire case of sluggishness as UK savers lack confidence, skills or knowledge about changing their occupational pensions. There is no lack of appetite, however, and it is the responsibility of the pension industry to encourage that appetite.
“The burden shouldn’t fall on individuals. In an inertial system, policymakers and employers must offer better failure strategies rather than relying on retirees to develop them themselves.
“The UK organ donation system is one of the most effective examples of opt-out in the world, but it is an underutilized tool if we are to make real change while protecting the authorities.
“By switching from standard company pensions to ESG funds, we would see a huge impact on sustainable investing. As with the organ donation example, we would also likely see a tremendous increase in the discussion about pensions, which lead people to concern themselves with their retirement plans and make their money a priority.
“If Britain is to lead a greener world, there is no time to waste – we have to follow the money and do whatever we can to make change.”