In a recent survey conducted by AlphaReal, it has been revealed that 90% of UK pension funds and insurers plan to increase their investment allocations in renewable energy infrastructure [204d2cb9]. Over a quarter of respondents plan to increase their allocations by more than 21% in the next three years. The majority of those intending to increase allocations (59%) expect to increase by more than 8%. Currently, 45% of respondents have allocations of 11% to 15% in renewable energy, while 16% have allocations of 6% to 10% [204d2cb9].
The survey also highlighted the top three reasons for increasing allocations towards renewable energy assets. The majority of respondents cited income generation (85%) as the primary reason for increasing investments. Diversification of portfolio (71%) and alignment with environmental, social, and governance (ESG) objectives (68%) were also significant factors influencing investment decisions [204d2cb9].
These findings demonstrate a growing trend among pension funds and insurers to prioritize renewable energy investments. The increased focus on renewable energy infrastructure reflects the industry's recognition of the potential for long-term returns and the alignment of investments with ESG goals. By increasing allocations in renewable energy, pension funds and insurers can contribute to the transition to a more sustainable and low-carbon economy while generating income and diversifying their portfolios [204d2cb9].