On the go: An overwhelming number of large UK pension schemes are yet to make net-zero commitments ahead of the COP26 summit, pensions campaign group Make My Money Matter has revealed.
The group said that although progress has been made during the past 12 months, 71 per cent of major UK schemes are yet to make robust net-zero commitments. This means that almost £2tn in UK pension schemes is still negatively impacting the climate.
However, £800bn worth of UK pensions money is now in schemes working to tackle the climate crisis, the research found.
Richard Curtis, Make My Money Matter co-founder, said: “Over the past year, we’ve seen how powerful our pensions can be in tackling the climate crisis. With leading businesses committing to sustainable pensions, citizens using their pension power to green their investments, and robust net-zero commitments from progressive pension providers, the movement to make our money matter is growing every day.”
The schemes that have not committed to net zero in their investment portfolios include those of large retail, industry, technology and financial services companies, as well as local government schemes.
The group also identified a disparity between defined benefit and defined contribution commitments to net zero.
While sizeable DC workplace pension providers have “embraced” the “race to zero”, with almost all the leading 15 companies making credible emission-reduction pledges, the majority of DB schemes are lagging behind.
The report noted that DB schemes that are heavily derisked can face increased challenges in influencing climate outcomes, but it should not be a reason to not engage with the issue.
Make My Money Matter has called on all schemes to commit to robust net-zero targets and is urging the government to make net zero mandatory for all schemes — forcing those that have yet to commit to act.
“This report highlights just how far we have to go,” Curtis said.
“With almost three-quarters of leading pensions schemes not yet aligned with the goals of the Paris Agreement, we have to act with urgency to make sure that the trillions in our pensions help tackle the climate crisis, not fuel the fire. We need pensions to be proud of.
“Our report shows that voluntary action alone is not enough, and that’s why we want the UK government to make net zero mandatory for all schemes at COP26. That way, we can be confident that all pensions, while looking after our money, also work towards protecting our planet,” he added.
