Schemes enable more CO2 than entire UK carbon footprint

UK pensions industry would be ‘top 20’ global carbon emitter

If the UK pensions industry was a country, it would find itself in the top 20 carbon emitters globally, research from Make My Money Matter and Route2 has found. It claims that for every £1,000 invested by UK schemes, £60 is estimated to be invested in the fossil fuel industry. To offset these emissions, the industry would need to reforest 50 per cent of the UK’s entire landmass. Daniel Dias, founder of Route2, said: “Our analysis has shown that, because of the vast sums of money that [UK pensions] are responsible for, the levels of greenhouse gas emissions that they have influence over is significant. It also demonstrates that selecting pension schemes that are more climate-sensitive is an effective tool in combating climate change.” Make My Money Matter is calling on the UK government to make net zero mandatory for all UK schemes and providers at COP26, building on the chancellor’s recently announced sustainability disclosure requirements.

Less than 1% of global fund assets are Paris-aligned

Analysis by non-profit organisation CDP of more than 16,500 investment funds worth $27tn (£19.7tn) has revealed that less than 0.5 per cent of the assets are currently aligned with the Paris Agreement’s temperature target of “well below 2C”. Most global funds assessed are currently invested in assets with an expected temperature path of more than 2.75C of global warming, the analysis claimed. Laurent Babikian, global director of capital markets at CDP, said: “Despite mounting net-zero commitments from the financial sector, and an apparent ESG ‘boom’, the truth is that not even 1 per cent of fund assets are currently Paris-aligned. It’s an urgent reality check for real, credible actions now from the financial community to step up engagement with their portfolios and take decisive action to transition their portfolios on to a 1.5C path.”

Smart Pension has 70% of default investments in ESG funds

Smart Pension has announced that the majority of its master trust default investment strategy assets are now held in equity funds that invest according to a strict ESG assessment. Paul Bucksey, managing director at Smart Pension, said: “With the success of industry action groups such as Make My Money Matter, and from our own research, we know that our members are increasingly looking at what their pension savings are doing as they accumulate. Smart Pension is leading the pack with more assets in ESG-approved funds than ever.” In March, Smart Pension opened up the benefits of private market illiquids for its members through the new MV Dual Credit strategy, which represented 10 per cent of its default fund’s assets.