On the go: Three-fifths of workplace pension members do not know if their scheme is taking any action to combat climate change, according to a survey by the Pensions and Lifetime Savings Association.
The PLSA, which polled more than 2,000 people, found that 80 per cent of respondents think global warming is an important issue, with about half (51 per cent) saying it is “extremely” or “very” important to them.
Despite this, just 15 per cent said they thought their pension scheme was taking action to combat climate change, while 59 per cent said they did not know if their scheme had taken any action.
The figures will come as a disappointment to the large number of pension funds that have taken steps in recent times to address climate risk, whether by “greening” their portfolios, aligning themselves with Paris agreement targets, instigating environmental, social and governance tilts in their investment options, or divesting from fossil fuel companies, the PLSA said.
However, the survey results also found that a considerable number of people do not understand even the basics of what pension schemes do with their money, suggesting the issue might be a general one.
Only around two-thirds (68 per cent) of respondents understand that pensions schemes invest in a range of companies, while only 22 per cent said they know the types of companies in which their pension is invested.
There is, though, strong support for greater transparency, especially around climate impact, the PLSA research concluded. Sixty-two per cent of respondents said pension schemes and other investors should hold companies and their owners accountable for their efforts to combat climate change.
Two-thirds said investors have a responsibility to engage with the companies they invest in to encourage them to do more, and a similar proportion (65 per cent) said financial services firms should report on the climate impact of those companies they invest in.
Clear majorities said pension schemes and financial services firms should be transparent about whether and how they invest in a “climate-aware” way (68 per cent and 69 per cent respectively).
According to PLSA chair Richard Butcher, in recent years “there has been a big momentum shift in attitudes towards climate change and the public rightly expects to see more action from the corporate and financial worlds”.
“They want us to make a positive difference,” he noted.
“What this survey shows is that many people do not realise that pension schemes are unanimous in their support for investing in a climate-aware way and have been at the vanguard of encouraging better corporate behaviour with respect to climate change.
“UK pension schemes manage more than £2tn on behalf of the public,” Butcher continued.
“Savers have told us they want us to use the money to make the world a better place. It is consistent with our fiduciary duty that we do so and tell them about the positive impact their savings have made.”
