The world is facing a climate emergency, yet trillions of pounds are still being pumped into the companies fuelling the crisis.
The worst part? It’s our money – through our pensions – that’s being used to fund these firms.
Nine times out of ten, our pension savings are going into default investment funds that invest in the biggest companies in financial markets. And this means tobacco firms, oil and gas majors, mining and big banks.
Now ShareAction, a non-profit campaign group dedicated to making investment a force for good, has created an online tool to help you change this. It enables you to email your MP directly asking them to support a crucial new amendment to the Pensions Bills that is due to be debated in Parliament this Spring – and demand that it goes further.
The amendment would currently force pensions providers to report on their climate change strategies as well as how their investments support the goals of the Paris Climate Agreement. However, it doesn’t ask them to change the way they invest our money to help tackle the climate crisis.
To make sense of your pension and ensure it is used for positive impact, check out our Good Guide to Pensions.
The global pensions industry accounts for half of all of the money in the world – £32 trillion. To put this into perspective, if you divided it between everyone in the WHOLE WORLD we’d all get more than £4,150 each.
It means the potential for affecting change with our pension savings is enormous.
The UK accounts for £2.2 trillion of this share, more than £1 trillion of which is sitting in mega workplace pension schemes run by boards of trustees that are still funding global destruction and giving savers very little say about it.
Traditionally pension schemes have favoured a low-risk approach, which previously has meant choosing the ‘big companies.’
But mounting evidence shows that investing in destructive industries means losing money today, while those investing for Good are making MORE money.
The comparison of returns in the ‘default versus ethical funds’ table in our Good Guide to Pensions supports this.
However, the pensions industry has been slow to move on switching to ethical funds. It is even widely failing to comply with UK law that requires providers to disclose HOW they are protecting savers’ money from climate risk.
A recent study by the UK Sustainable Investment and Finance Association (UKSIF) found that only a third of pension trustees have complied with legal transparency requirements. UKSIF has called on the Pensions Regulator to carry out an urgent review.
A change to the law in 2019 means trustees must publish their approach to protecting people’s pensions from the financial risks of climate change and other issues. UKSIF’s report found that while the majority of pension scheme trustees believe Environmental, Social and Governance (ESG) issues will negatively affect their savers’ assets, most have “thin and non-committal” policies for managing ESG financial risk.
By emailing your MP, you can have your say on how your pension savings are used and demand that they speak louder in Parliament on your behalf.