On the go: Savers can play an important role in addressing climate change by paying more attention to their pensions and where they are invested, pensions minister Guy Opperman has said.
Mr Opperman said if people wanted to contribute to the net-zero effort then they had to “engage with their pensions and encourage sustainable investments”.
His comments formed part of a collection of essays, published on Tuesday by the cross-party think tank Social Market Foundation and the Chartered Banker Institute, regarding green finance and the role that financial services can play in delivering environmental goals.
Mr Opperman claimed that with the more than 10m people now auto-enrolled, along with trillions in assets under management, pensions could do a lot to tackle the climate crisis.
He said: “If we can unleash the productive power of our pension funds, they can be at the forefront of seizing sustainable opportunities by financing the green tech and green energy revolution that we need.”
He added: “I want to see our British pension funds investing in new technologies such as wind, solar and hydrogen. These innovative technologies can turbo charge the way we travel, help us achieve net-zero, and provide the long-term return that savers need.”
In 2015, the Task Force on Climate-related Financial Disclosures was set up to encourage the financial world to hit net-zero targets.
The pensions schemes bill, which is due to have its second reading in the House of Commons on Wednesday, includes provisions that will allow the government to mandate pension schemes to adopt the recommendations of the task force.
The bill will also give the government the power to require schemes to take account of the government’s net-zero targets, as well as the Paris Agreement goals of limiting the rise of average global temperatures.
Mr Opperman noted that more people than ever were thinking about how their pensions are invested. “Many people are now taking a personal interest in how their own savings can play their part in getting Britain to net-zero,” he said.
“Some people believe that the government should simply force pension trustees to divest from high-carbon stocks. I fundamentally disagree.
“Simply selling these assets to others without the same environmental concerns is counterproductive and will do nothing to get Britain to net-zero.”
He added: “Net-zero is a long-term challenge facing our country. By unleashing the productive power of our pensions and engaging with savers, we can get there.”
This article originally appeared on ftadviser.com
