Large DB pension schemes are lagging the DC pension sector when it comes to addressing climate change, with more than seven out of 10 schemes failing to set ‘robust’ net zero targets
Research from the campaign group Make My Money Matter said 71 out of 100 major UK DB schemes have yet to set net zero emission targets.
MMMM says this contrasts sharply with the DC sector, where the vast majority of sizeable DC workplace pension providers have embraced the ‘race to zero’. It says almost all of the leading 15 DC workplace schemes now have “credible” emissions reduction pledges in place.
This research comes ahead of the climate change summit, COP26, which will be held in Glasgow next month. Make My Money Matter, which was founded by filmmaker and activist Richard Curtis, is calling for the government to make net zero mandatory for pension schemes at this summit.
MMMM says progress has been made on this issue over the past 12 months – with an estimated £800 billion worth of UK pension money now in schemes working to tackle the climate crisis. However it points out there is still almost £2 trillion in UK pension schemes that are driving the climate emergency, risking the health of the planet and the health of investor returns.
Richard Curtis, co-founder at Make My Money Matter says: “Over the past year, we’ve seen how powerful our pensions can be in tackling the climate crisis.
“But this report highlights just how far we have to go. 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. After all, what’s the point in collecting a pension in a world on fire?”
Make My Money Matter has published a full list of schemes that have yet to commit to net zero and address the issue of climate change, which may increase pressure from corporate sponsors – many of whom have their own net zero targets – and scheme members for greener investment strategies.
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