The election of climate sceptic Donald Trump as US president could give Irish pension funds an opportunity to invest in renewable energy and sustainable natural resources, a pensions forum heard on Tuesday.
Rob Meaney, a senior investment consultant at Mercer, said a likely reduction in federal funding for renewable energy and sustainable development projects in the US under a Trump administration would create demand for other private sector funding of projects, including from pension funds.
“Global sustainability challenges such as climate change and resource scarcity are of crucial importance and investors are now starting their long-term planning to address the associated risks and opportunities,” said Mr Meaney.
“Areas that have performed well in the past may not necessarily perform as well in the future and institutional investors, including Irish pension scheme trustees, will need to refresh their long-term investment views to adapt to this changing world.”
Mercer was outlining its view of the market and investment strategy trends for 2017 at its annual investment seminar for more than 100 industry professionals who, between them, manage funds of more than €30 billion.
Mercer says that ongoing political uncertainty – related both to the Trump election and the Brexit poll outcome, as well as to upcoming elections in Europe – will heavily influence the investment market this year.
Paul Kenny, who is head of investment strategy for Mercer Ireland, said that despite strong returns from stock markets in recent years, "significant risks remain for Irish pension schemes".
“It is a difficult environment, with investors torn between the potential short-term political risks on the one hand, and longer-term challenges such as demographic headwinds, disruptive technology, global warming and resource scarcity, on the other.”
