On the go: Some of the UK’s largest pension funds, representing 4m members, are demanding asset managers take immediate action on climate change.
The trustees and chief investment officers of £367bn in pension assets have signed a climate charter calling on fund houses, and the companies they invest in, to pull their weight tackling the climate emergency.
The charter, created by pensions social media platform Mallowstreet, is calling on the investment industry to ask “What is the impact on the climate?” for each and every investment decision.
Mallowstreet is also urging all employees and members of UK pension schemes to write to the managers of their pension funds demanding they sign up to the charter if they have not done so.
So far 76 trustees, from pension funds including Lloyds Banking Group, National Grid, Aviva, Nestlé UK and Santander UK, have signed the charter.
Their combined assets represent three times the annual spend on the NHS, and at 4m people their membership is equivalent to more than one in eight of the UK’s workforce.
The charter was created following a summit of pension fund trustees in June, where it was decided that the climate emergency was so critical that action had to be taken immediately.
While the trustees have signed the charter in their personal capacities, which means it is not binding on the pension funds they represent, they said they expect a swift response to the way their pension funds allocate assets; bringing them more in line with environmental, social and governance factors.
Dawid Konotey-Ahulu, co-founder and director of Mallowstreet, said it was time the investment industry used its powers to make a meaningful difference in the fight against climate change.
He said: “What the climate charter will achieve is that at every trustee meeting of pension funds someone will ask: ‘If we make this investment, what is the impact on the climate?’, putting the climate emergency at the top of the agenda.
“We want everyone to ask their pension fund provider what they are doing to combat climate change.”
Paul Trickett, chair of the Railpen Investments Board and the trustee board at Santander UK, said: “The time has come for asset owners to focus on this as a core part of their investment decision-making.
“Investment returns should not suffer in the long run, though they may do in the short term, which means asset owners will need to balance conflicting priorities – but they are used to that.”
Mark Tennant, chairman of a FTSE 100 pension fund with £8bn of assets, added: “The problem we have with climate change is that everyone talks about it and everyone is deeply concerned, but very little is being done.
“The pensions industry as asset owners should be working with the government to achieve the goal of net-zero by 2050.”
