Pension funds: it’s time to get climate-conscious
Pushing pension funds to become climate-conscious is going to be vital if we are to have the smooth, fair transition we urgently need to a low carbon economy. With billions entrusted in them by working people, the investment decisions they make are crucial to the shape and health of our economy.
The TUC has been working hard to support, educate and guide member-nominated trustees for many years. At ShareAction, we believe there is now a compelling case to factor climate risk more prominently into that guidance. If we want our children and grandchildren to live in communities with real job prospects and a stable, safe environment, we must start factoring the climate’s future into investment decisions made today.
That’s why our new initiative, Green Light, seeks to catalyse the rapid reallocation of capital to green infrastructure and clean technologies, boosting green jobs growth and a sustainable future for us all.
Unfortunately, we are currently far from that reality: the average pension fund is estimated to have 55% of its investments in fossil fuels. This is not only harming our planet and stymieing the transition to a green economy, but could mean significant damage to our pension pots too. Research from Carbon Tracker has shown that current valuations of fossil fuel companies could plummet when governments take action to limit carbon emissions in line with the 2 degree temperature rise commitment. So long as our pension savings remain deeply invested in high carbon companies, we’ll lose out financially too.
This ‘carbon bubble’ is exactly why pension funds urgently need a push from unions and civil society to shift into low carbon investments. ShareAction’s Green Light campaign will mobilise pension savers and their unions to scrutinise schemes’ decisions and to work with trustees on why this matters and what they can do. We’ve already started by launching an e-action so you can contact your pension fund and find out if they’re taking the carbon bubble seriously. You can find it here: www.shareaction.org/carbonbubble.
Savers from around the country are already telling us that they want their schemes to do more. We’re working with them to make that happen and we want to work with you too. With invaluable support from the TUC, we’re building a broad coalition of climate-concerned civil society organisations. Together, we’re going to create people-powered change in this under-scrutinised industry.
If you’re interested in being part of Green Light, or simply want to find out more, drop our Outreach Officer Jo Beardsmore a line at [email protected]