UK Pension Funds Move £28 Billion to Amundi, Invesco Citing ESG

In a significant shift in the UK's investment landscape, pension funds have moved £28 billion to asset management giants Amundi and Invesco, citing environmental, social, and governance (ESG) factors as a key driver. This move underscores the growing importance of responsible investing in the UK's pension industry and its alignment with the country's net-zero goals and other sustainable investment objectives.

The decision by UK pension funds to allocate a substantial portion of their assets to Amundi and Invesco reflects the increasing focus on ESG integration in investment strategies. According to Mercer's Responsible Investment Total Evaluation (RITE) assessment, many UK pension schemes have made significant progress in integrating sustainability into their investment strategies. The average overall scores for both defined benefit (DB) and defined contribution (DC) schemes have increased, with schemes ranked A or better having more than doubled to 13% (Mercer, 2025).

Amundi, a European leader in responsible investment, has a dedicated ESG department with over 40 people worldwide, focusing on ESG integration, scoring methodology, and engagement with companies. The company has received high-quality international awards for its sustainability and ESG efforts, such as the Best Sustainability Firm in the European Markets Choice Awards 2021 and the Fixed Income Manager of the Year in the Sustainable Investment Awards 2021 (Amundi, 2021).

Invesco, another prominent asset manager, has a strong focus on ESG integration and responsible investment, with a dedicated ESG team and a range of ESG-focused funds. The company has signed the UN Principles for Responsible Investment (PRI) and is committed to aligning its investment activities with the Paris Agreement (Invesco, 2023).

The shift in investment strategy towards sustainable and responsible investment (SRI) aligns with the UK's net-zero goals and other sustainable investment goals in several ways. Firstly, it promotes the integration of sustainability into investment processes, supporting the Paris Agreement and contributing to a fair environmental transition. Secondly, it encourages investment in green and sustainable assets, such as renewable energy projects and green bonds. Lastly, it fosters engagement and voting policies that focus on climate issues and social cohesion, driving positive change in the companies in which pension funds invest.

The move towards a more diversified investment portfolio by UK pension funds, particularly the shift away from UK listed equities, could have several impacts on the UK's domestic investment landscape and capital market development. While the reduction in investment in UK listed equities could lead to a decrease in demand for these assets, potentially impacting their liquidity and pricing, the increase in investment in private markets, such as infrastructure and real estate, could have a positive impact on the UK's domestic investment landscape. This could lead to increased investment in UK-based infrastructure projects and real estate developments, which could help to stimulate economic growth and job creation. Additionally, the increase in investment in overseas assets could have a positive impact on the UK's capital market development, leading to increased demand for UK-based assets from overseas investors.

In conclusion, the move by UK pension funds to allocate £28 billion to Amundi and Invesco, driven by ESG considerations, reflects the growing importance of responsible investing in the UK's pension industry. This shift aligns with the UK's net-zero goals and other sustainable investment objectives, promoting the integration of sustainability into investment processes, investment in green and sustainable assets, and engagement with companies on ESG issues. The move could have both positive and negative impacts on the UK's domestic investment landscape and capital market development, depending on factors such as the extent of investor demand in different markets and the types of assets being invested in.