Don’t retire into a world on fire

Written by Huw Davies on 8th Nov 2021

This article is an extract from our new Good Guide to Net Zero, which explains what net zero actually is, how it affects you, and how you can apply the concept to your own life and finances. In partnership with Triodos Bank, Ecology Building Society, Nest pensions, Ethex and Make My Money Matter.

With climate now at the top of the global agenda, most of us will have heard the term ‘net zero’ used by politicians, business leaders, and activists alike. As countries and firms set their own emissions reduction goals, citizens are looking for ways to play their part in this global challenge, and many of us are making lifestyle changes to reduce our carbon footprint.

This may be eating less meat, switching to renewable energy, using public transport, or making conscious choices to purchase more sustainable products.

But often the power of our money is overlooked in the climate actions we can take to help move to net zero. This applies to our savings, who we choose to bank with, and importantly what our pensions are invested in. Thanks to auto-enrolment, many of us now have a pension, and over a lifetime it can grow to be possibly the largest asset we own. The money in our pensions is ours, and it is invested for us during our working life, making much of the public unwitting investors.

There is currently £2.6 trillion circulating in the UK pension sector and a lot of it is invested in industries that are unravelling the health of our planet. In fact, we face a predicament whereby the most passionate climate activist may find that they have unknowingly invested into fossil fuels throughout their career, or a lifelong vegetarian into companies with links to factory farming and deforestation.

The Make My Money Matter campaign was set up to encourage individuals to harness the hidden superpower of their pensions to fight the climate crisis and move to net zero. Make My Money Matter/YouGov polling found that most savers (63 per cent) have no idea where their money is invested, but almost two thirds (61 per cent) of pension holders say that they want their retirement savings to help fight climate change.

How climate-friendly is your pension? Find out in an instant with


What are we calling for?

We are calling on all UK pension schemes to make, and deliver on, robust commitments to achieve net zero by 2050 at the absolute latest, crucially including halving their emissions this decade in line with the Paris Climate Agreement and climate science.

Since we launched in June 2020, we have seen many schemes and providers rise to the challenge and join the ‘race to zero’ across the industry, with around £800 billion now in pension schemes that have made robust net zero commitments. However, there is still a long way to go; almost £2 trillion remains in schemes that have failed to make adequate commitments, and a shocking 70 percent of 100 major UK pension schemes have yet to do so.

We also recognise that amidst the growing awareness and pressure to act, there is a risk of ‘greenwashing’ – shallow commitments made to look good whilst not substantially changing – this risk applies everywhere, and includes pension schemes. To avoid this Make My Money Matter, in collaboration with others, has developed stringent criteria on what we believe makes for a ‘good’ net zero that delivers front loaded action on climate. Simply put, schemes and providers should adhere to the following:

  • Align with Paris/IPCC: Portfolios should match the 1.5°C ambition of the Paris Climate Accord, including halving emissions before 2030 and reaching full net zero by 2050 at the absolute latest.
  • Say no to Coal: Providers should ensure a rapid exit from all coal investments.
  • Use your pension power: Trustees must actively engage with companies they own and use their voting power on shareholder resolutions at AGMs.
  • Divest where necessary: Where engagement doesn’t work, providers should divest from high emission companies who don’t have credible net zero strategies or refuse to transition.
  • Fund the future: Providers should proactively invest in climate solutions, such as renewable energy and green infrastructure, and support a just transition to consider the impact that climate transition may have on jobs and livelihoods.
  • Match best practice: Providers should draw on international best practice frameworks, such as the Net Zero Asset Owner Alliance, when forming and delivering plans to reach net zero.

What can I do?

And so back to us all as individuals – we have one of the most crucial roles in getting our powerful pension schemes to act. There are a range of easy steps that people can take to make sure that their money is committed to net zero and not fuelling the climate crisis:

  1. First, find out where your pension is invested and whether it is in line with your values. If you’re not happy, ask your pension provider to change and
    go green. If you are not satisfied with the reply, you may wish to investigate what options you have to move into a pension fund you can truly be proud of. Make My Money Matter has a handy template you can send your provider here
  2. Check out your workplace pension: Many pensions are organised by employers. Ask your boss or HR where the company pension is invested and check if it aligns with their sustainability plans. After all, what’s the point of companies making brilliant climate commitments, but then failing to consider our pensions? Again, this template may help
  3. Shout about it: Money can be such a taboo topic and, to spark real change, this is something we need to stop. So, talk to your friends, family and colleagues, and see whether their pensions are working to protect our planet.Ambition to action: Finally, providers should start acting now, reporting annually on their progress to members and holding themselves tochallenging five-year benchmarks.Finally, we believe that, despite progress, voluntary commitments are insufficient. To address this, Make My Money Matter is calling on UK Government to make net zero mandatory for all schemes here in the UK – demonstrating climate leadership on the world stage, and taking bold action before it’s too late.

After all, what’s the point retiring into a world on fire?

Find out how to make your pension work for good – in our Good Guide to Pensions


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