Across the country, many leading companies are tackling climate change by reducing emissions and setting ambitious net zero targets by joining the #RaceToZero, but too often they ignore one of the most powerful tools at their disposal – pensions.
This is a critical year for the UK as it hosts Cop26, the most important global climate summit in decades. With consumer interest rising and green investments experiencing record growth, this is a unique opportunity for Britain to showcase how our financial system can be leveraged to tackle climate change on the global stage.
To achieve this, we must all commit to making our money matter, starting with our pensions. Each year, billions are invested through UK corporate pension schemes, but too often the investment goes against the wishes of savers and contrary to the values of the businesses whose money is being invested. Why is it that a company working hard to achieve net zero in its operations continues to invest millions into a pension scheme that does the opposite?
Pension funds urged to help UK reach net zero climate goalsRead more
This dichotomy means the hard work of businesses tackling climate change in their supply chains – or individual savers working hard to reduce their carbon footprint – may be undermined by the impact of their investments.
But it doesn’t have to be this way. We believe that if all companies commit to green pensions, we can help to ensure the £2.6tn invested in UK pensions supports a clean, sustainable transition to a net zero world.
That’s why we are calling on all businesses to sign up to the green pensions charter. This commits signatories to making sure their company pension schemes achieve net zero emissions by 2050 at the latest – with a halving of emissions by 2030.
The UK pensions industry has reached a tipping point with major climate commitments coming from Scottish Widows, Aviva, Nest and the BT pension scheme, alongside powerful local government schemes, sparking a race to the top among providers determined to deliver the best outcomes for their members.
In fact, we have already seen 15 schemes make robust net zero commitments, meaning that almost £400bn of our pension money will now work towards building a better future. Ahead of Cop26, we want all schemes to follow suit and use their immense power to drive the green pension revolution.
So, if we want to deliver healthy returns for our retirement as well as ensure a healthy world for our grandchildren, 2021 needs to be the year that we unleash the power of our pensions. You can play a critical role in this by signing up to the charter and joining leading organisations committing to green pensions.After all, what’s the point in saving for retirement in a world on fire?
Christiana Figueres Former executive secretary, United Nations Framework Convention on Climate Change
Nigel Topping UK high-level climate action champion, Cop26
Richard Curtis Co-founder, Make My Money Matter
Amanda Mackenzie CEO, Business in the Community
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