The Pensions and Lifetime Savings Association (PLSA) has launched a new guide aiming to explain Environmental, Social and Corporate Governance investment approaches, and how they can be applied by pension schemes.

The guide, developed by PSLA along with BNP Paribas Securities Services, forms part of PSLA’s series of Made Simple guides which cover a range of investment topics and approaches, including multi asset credit, diversified growth funds and foreign exchange.

The Made Simple Guide on Environmental, Social and Corporate Governance (ESG) is intended to bring ESG to the attention of pension funds. According to Lesley Williams, PLSA’s chair, “there is a growing body of evidence showing that integrating environmental, social and governance considerations into investment decisions can have a positive impact on risk-adjusted returns, particularly over the long-term time horizons applicable to pension funds’ investments.”

According to Sid Newby, UK head of sales for pensions at BNP Paribas Securities Services and co-author of the guide said that Pension funds are moving away from the view that ESG is and optional extra or a negative factor for performance.

Instead, an ESG investment structure “can complement existing investment processes and even help generate positive returns over time.”