Leading charities and finance companies, including Make My Money Matter, have written to the Prime Minister, asking him to legislate to ensure all pensions commit to net zero, and invest in a climate safe world.
They are calling on him to agree an amendment (“The PensionPower Amendment”) to the Pension Schemes Bill, now reaching its last stage in Parliament, which would require pension schemes to implement strategies that align with the Paris Agreement on climate change. Such an amendment has now been put down by Labour for a vote on Monday.
The Chancellor announced this week that the Government would introduce mandatory reporting by big companies and financial institutions on the risk of climate change. This is a vital and welcome step, however, the Government has an opportunity in the Pension Schemes Bill to provide further leadership by asking for pension schemes to set clear targets and forward-looking climate strategies.
The organisations and companies signing on to the letter include Aldersgate Group, Aviva, Aviva Investors, Bioregional, BITC, CAFOD, Carbon Tracker, Christian Aid, ClientEarth, E3G, Ecotricity, Environmental Finance, Friends of the Earth, Good Energy, Greenpeace UK, Make My Money Matter, Oxfam, Rambol, Save the Children, ShareAction, South Yorkshire Pensions Authority, The Climate Coalition, Triodos, West Yorkshire Pension Fund, WSP.
Pension firms representing over 6 million members and with assets in excess of £100bn have signed the letter.
Richard Curtis, Co-Founder of Make My Money Matter said “Our Pensions are powerful, and the government has a once in a generation shot at giving us all pensions to be proud of. We know that UK savers want their money to matter, and this Amendment offers the perfect opportunity to ensure our savings help build a world we actually want to retire in”.
Lindsey Rix, Chief Executive Officer of Savings and Retirement at Aviva, said: “There is currently around £3trillion invested in UK pension schemes, so there is an enormous opportunity for pensions schemes to play a central role in the fight against climate change. We welcome the Government’s actions to ensure that schemes consider their exposure to climate change but if the UK is to meet its net-zero emission target, we need to go further. Aviva has committed to ensuring its own auto-enrolment default pension funds are net-zero by 2050. This is a significant move that will ensure that our pensions customers are on a pathway to net-zero. However, only by mandating that all schemes set out how they will achieve net-zero by 2050 will it be possible to harness the full weight of pension savings to tackle climate change and to best serve the long-term interests of UK pension savers.”
With £3 trillion invested in UK pensions, it is vital that pension schemes use their considerable influence to ensure the companies they invest in are on a trajectory to net-zero emissions in line with the Paris Agreement and 1.5°C. In doing so, schemes would play a proactive role in helping the government achieve its own net-zero commitment, support the UK’s onward economic recovery, spur innovation, and create green jobs. There are 19 million pension savers across the UK. Climate change poses a real financial risk to people’s pensions and there is clear evidence that people want their pension fund invested responsibly. With two of the UK’s largest pension providers – Aviva and Nest – now committed to Net Zero, the coalition believes it’s time for all UK savers to have Pensions to be Proud Of.