Despite the growth in impact investing, UK pension funds still fail to apply impact data effectively
A new report has found that while many UK pension funds receive impact reports from asset managers, few are actually reading or using them to guide investment decisions — raising concerns about the effectiveness of current impact reporting practices.
Published by Pensions for Purpose and commissioned by Impact Frontiers, the report titled Impact Integration: Advancing Reporting & Management Practices in Pension Funds draws on interviews and surveys with 19 pension funds, asset managers, advisers, and consultants.
It reveals that despite the UK’s impact investing market growing more than 10% annually from 2021 to 2023, many institutional investors still lack clarity on how to interpret and apply impact data.
“Impact reports are too often treated as a box-ticking exercise,” said Bruna Bauer, research manager at Pensions for Purpose. “Many pension funds aren’t reading the reports they receive, and even fewer are challenging what’s in them. That’s a missed opportunity for both better investments and better risk management.”
The study found that while most pension funds check whether their managers produce reports, few engage deeply with their contents. Trustees, in particular, often report only “average” impact literacy, with little confidence in evaluating the relevance or accuracy of reports.
On the asset manager side, data collection remains a challenge. Reports can be inconsistent and hard to compare, especially across underlying investments. Some managers rely heavily on storytelling over substance, with little scrutiny from clients.
To address these issues, the report recommends adopting frameworks such as the Impact Performance Reporting Norms and the Operating Principles for Impact Management to improve the credibility and usability of reports.
A new Community Interest Group for pension funds and advisers will launch in August to pilot practical tools and improve impact literacy across the sector. The initiative aims to align fiduciary duty with long-term goals, including net zero.
