Pension funds are long-term investors and their ability to generate long-term returns relies on the performance of the markets and economies in which they invest. Because sustainability factors such as climate change and biodiversity loss threaten the performance of the markets and economies on which they rely for financial returns, pension funds have a responsibility to consider whether sustainability-related risks will inhibit their ability to protect long-term value and provide an adequate pension to their members or beneficiaries. Accordingly, pension funds are increasingly seeking to mitigate these risks through their investment decisions and stewardship activities.

This report, by the Principles of Responsible Investment (PRI), summarizes 10 priorities that are necessary for a pension system to take sustainability considerations into account. These priorities could enable and incentive pension funds, their investment managers and consultants to build sustainable investment portfolios and help pension fund members become more informed about the sustainability objectives of their schemes. This report also analyses the extent to which the Australian, UK and US pension systems have made progress on each priority.