Ecology and economy go hand in hand

"Green" pension provision can now be made in numerous ways. Since the introduction of the transparency regulation this is comprehensible for all customers. However, the accusation persists that green investments can lead to lower returns.

What exactly is meant by "green" or "sustainable" in terms of pension provision depends somewhat on who is asked. ERGO looks at the well-known ESG criteria for assessing sustainability, from its own business operations to the sustainability of its own products and investments. In addition to the environmental aspect, social concerns and the principles of good corporate governance are also taken into account. The environmental dimension is concerned, among other things, with the efficient use of resources and the avoidance of environmental damage. Social aspects also take into account fair working conditions, appropriate pay and the promotion of equal rights, while good corporate governance looks at whether companies are managed responsibly and report transparently on their activities.

Better returns through green retirement investing

Various studies have shown that green investments can provide comparable or better long-term returns than traditional investments. A study by Oxford University, for example, found that companies with good sustainability practices have higher operational performance, which ultimately translates into better cash flows. This shows that green pensions can be financially attractive in addition to having a positive impact on the environment.

Higher profitability for sustainable companies

In addition, sustainable companies are on average more profitable than non-sustainable companies, as a study by the accounting firm McKinsey, among others, found. They are also less susceptible to environmental risks and can benefit from the growing demand for environmentally friendly products and services. Another finding: as demand for sustainable products and services is likely to continue to rise in the future, this should also have a positive effect on the value of green investments.

Promoting sustainable developments worldwide

Through a green pension plan, one can also actively contribute to the promotion of sustainable development. Investments in renewable energies, environmentally friendly technologies and climate-friendly infrastructures support the transition to a low-emission economy. A study by the Global Sustainable Investment Alliance shows that green investments have increased significantly in global terms. According to the study, total global professionally managed assets topped $35 trillion in 2020, a 15 percent increase in two years.

Green provisioning demonstrates foresight

Research has shown that green investments can generate solid long-term returns and tend to mitigate financial risk. In addition, you indirectly help promote sustainable development by investing in companies that score higher than others on environmental and social issues, among other things. Given the urgency of action to mitigate climate change, choosing a green retirement plan is not only responsible, but also far-sighted.