The pension investments of major FTSE 100 companies finance seven times more carbon emissions than their sponsoring UK companies, according to the latest data from Make My Money Matter and Scottish Widows.
This climate finance campaign group founded by film maker Richard Curtis suggests major businesses’ efforts to operate more sustainably are being undermined by the investments within their company pension schemes. It says that the investments of FTSE100 pension schemes currently finance an estimated 131 million tonnes of unreported carbon to enter our atmosphere each year.
Poor awareness among leadership around the link between pensions and climate change is compounding the problem. Further research by Make My Money Matter shows that less than half (45 per cent) of CEOs and business leaders know that their company pension scheme could be driving climate change, and that less than 10 per cent of FTSE100 companies even mention pensions within their sustainability strategies.
The inaction is out of touch with the growing demands of staff who increasingly want their employers to offer more sustainable pensions. Research by Scottish Widows shows that the majority (72 per cent) of workers want their employer to invest their pension sustainably, while current job seekers also cite this as a top five employer priority alongside flexible working and attractive holiday packages.
Make My Money Matter co-founder Richard Curtis says: “Pensions are one of the most powerful tools UK businesses have to tackle the climate emergency.
“But for too long, businesses have failed to capitalise on this opportunity – company pensions now finance a staggering seven times more carbon than the emissions produced by those same businesses. For organisations to be acting credibly and decisively on climate, green pensions must be a crucial part of their plans.
“We hope this report acts as an urgent wake-up call and puts company pensions — and the billions invested by them each year — at the heart of all organisations’ sustainability strategies.”
Maria Nazarova-Doyle, head of pension investments at Scottish Widows adds: “With over £3 trillion invested in pensions in the UK, we simply can’t overlook the significant impact our pensions have on the future success of a net-zero economy – and ultimately, on the livelihoods of people and the planet.
“As this report shows, whilst progress has been made, there is a huge amount of work yet to be done in helping employers ensure their employees’ savings are invested in sustainable ways. Many companies simply aren’t aware of how their pension schemes are undermining or even undoing the sustainability progress they are making across their operations.
“Today’s workforce expects its employers to take an active stance on social and environmental issues. With the help of providers, business leaders now have real opportunity to unleash the power of pensions as a force for positive change and ensure their employees’ retirement savings are channelled into sustainable portfolios. In doing so they will show staff that they are serious about investing their money responsibly.”