More than 10 million employees are saving into a workplace pension following the launch of auto enrolment from October 2012.
The auto enrolment rules say that pension schemes should be easy to understand and have suitable investment options including a default strategy for those who do not make their own investment decisions.
Studies have shown that around nine out of every 10 employees invest in their scheme’s default pension fund.
However, Chase de Vere says that with companies “putting an ever greater focus on social and ethics issues and with more employees wanting their money to be invested responsibility, there is a distinct lack of support from product providers”.
A survey by Invesco, published in June, found that 72% of scheme members thought it was “a good idea” if their scheme included responsible or ethical investments as part of the default fund.
Rebecca Dorrian, corporate consultant at Chase de Vere, said: “We are finding that an increasing number of our corporate clients want ethical and socially responsible investments to be easily accessible to their employees through their workplace pension scheme.
“Many employees are also keen to invest responsibly and, while pension schemes typically have ethical options available, we know that most employees simply stick with their default fund.
“This is despite the fact that those investing ethically don’t necessarily have to sacrifice performance.
“Indeed, there is a strong argument that companies adopting a sustainable and responsible approach can out-perform over the longer term.
She added: “We need to see far more specific ethical and socially responsible default funds being made available and, at the very least, all providers should be paying far more consideration to these areas
“Auto enrolment has the opportunity to be a ‘game changer’ in terms of the retirement prospects of millions of people in the UK.
“An increased focus on investments in areas which are beneficial to society and to the environment can only help to increase engagement amongst employees.
“Whether or not people end up investing in a socially responsible manner shouldn’t be down to the lucky dip of which pension provider their employer has chosen.
“It’s time for all providers to stand up and do their part.”