Home Business NewsBusiness Pension holders must demand climate change action, say experts

Pension holders must demand climate change action, say experts

by LLB Editor
17th Feb 21 1:05 pm

 The PLSA’s research published today, found that three in five workplace pension holders don’t know if their pension scheme is taking any action on climate change.

Becky O’Connor, Head of Pensions and Savings, interactive investor, said: “Awareness of the power of pensions to help prevent climate damage has exploded this year. But in the past, genuine action from pension providers in this area has been patchy, with a pioneering few leading the way and others dragging their heels. Action on climate from more pension companies should be welcomed – it’s a case of better late than never.

“Regulatory changes on things like climate-related financial disclosures have prompted more to step into line. Consumer awareness campaigns have helped this along. But providers can’t take too much credit here. They’ve known for a long time that pension investments have historically had large exposure to fossil fuels – directly and also via the banks that lend to carbon-intensive companies. They knew they were part of the climate change problem for years before stepping up.

“The lack of awareness of this issue among pension holders is not their fault, if the message of how pensions work and what they are invested in isn’t being communicated. This needs to be fixed. The focus must now be on explaining how pensions work and how investments within them can be sustainable to customers in a transparent way, allowing them to have a say. It’s their money after all.

“A Sipp is the only way to manage your pension money completely in line with your own values. At interactive investor, we see a rising proportion of Sipp customers using ethical funds.”

Interactive investor, the flat fee pension provider, offers the ACE40 range of ethical and sustainable investments, which can be added into a Self-Invested Personal Pension.

A recent poll by interactive investor, found that almost two-fifths of investors (38%) actively invested more in ESG funds/shares over the past year, with 43% saying they take ESG into account when investing, and that this was mostly a result of the growing climate emergency focusing their minds. Over a quarter (26%) cited the strong performance of ESG related funds and shares as a factor in their decision.

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