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£300 billion of UK pension money invested in companies linked to deforestation

Deforestation image
  • Two pounds for every ten invested in an average pension is linked to deforestation.
  • Savers could unknowingly invest over £6,500 in businesses with high deforestation risk
  • 14 million people would switch pension provider if they discovered that their savings were contributing to deforestation.
  • Almost one third (31%) of UK pension public equity and corporate bond investments are financing companies with high deforestation risk.
  • Make My Money Matter calls on pension schemes to commit to deforestation-free portfolios.

Over £300 billion of UK pension money is invested in companies and financial institutions with high deforestation risk according to joint research by Make My Money Matter, SYSTEMIQ and Global Canopy.

For an average defined contribution pension saver in the UK, two pounds of every ten saved is invested in businesses with high deforestation risk.

In fact, pension holders could unknowingly invest over £6,500 in companies that are – directly or indirectly – helping destroy natural ecosystems and habitats, drive climate change and impact the livelihoods of indigenous communities across the globe.

These investments directly contradict the values of savers across the UK, as polling commissioned by Make My Money Matter revealed that the vast majority (77%) of pension holders would be unhappy to discover that their savings were contributing to deforestation.

Links to deforestation are savers’ top concern when it comes to their pension investments – surpassing worries around fossil fuels, labour rights violations and weapons manufacturing.

In fact, deforestation is so unpopular that many savers would be incentivised to act. Research shows that 27% of people would switch to a more sustainable provider if they discovered that their money was driving deforestation – that’s 14 million people in the UK. A further 3.2 million would even go as far as to reduce their pension contributions if they found that their money was linked to the practice.

With an estimated 30 football fields of forest lost every minute – and an area the size of London destroyed every week, Make My Money Matter is calling on pension schemes to listen to the views of their members by committing to deforestation free portfolios.

Richard Curtis, Co-Founder at Make My Money Matter commented:

“There’s an old saying ‘If a tree falls in a forest, and no-one hears, does it actually make a sound?”. Suddenly this old saying has become one of the world’s most important questions.

“Because while we may not see the forests falling or hear the trees crashing, we are all connected to deforestation. We’re connected as consumers, as citizens, and as this report powerfully highlights, as pensions holders too. Because it’s our money – managed through our pensions – that’s being invested in companies driving deforestation, damaging the environment, and threatening lives and livelihoods across the planet.

“But it doesn’t have to be this way. If pension funds commit to cutting deforestation from our portfolios – and our money is cleverly and massively applied to support the industries and business that are restoring, not jeopardizing, our natural environment – both profits and the planet can come out on top.

“That’s why now is the moment to make our money matter and to cut deforestation from our pensions for good. Now is the moment to hear the tree falling in the woods and take heroic action to protect our planet.”

Sonia Guajajara, Brazilian indigenous activist, environmentalist, and politician said:

“Our planet is our only home. In 2021 alone, in Brazil, the destruction of forests was 29% greater than in 2020. More than 10,00km2 of native forest were destroyed that year. Despite knowing this, the governments gathered at COP26 were not able to make significant commitments in favour of combating climate change. I was there, together with countless indigenous representatives. We were not even called to the real negotiation tables. 

“You have power to help save the forests. The power to help protect Mother Earth, and to protect the lives of all who live on the planet. Through the simple steps outlined in this report, you can use your voice to change the way your pension is invested – to protect nature, livelihoods, and create a world that you will actually want to retire into.”

Niki Mardas, Executive Director at Global Canopy said:

“It has been too easy for pension funds to turn a blind eye to the deforestation risks hidden in the investments they make on our behalf. Those risks are hidden in the complex supply chains, often ignored by the companies involved.

“But savers are clear: none of us want our money to be financing deforestation – and with it, climate change, extinctions and impacts on local people. Now fund managers have no excuse not to act. The information they need to identify where the risks lie is available. It is time to listen to their customers and act.”

Katherine Stodulka, Partner at SYSTEMIQ and Programme Director at the Blended Finance Taskforce commented:

“The pensions industry is critical to tackling deforestation: it has powerful tools to understand climate- and nature-related financial risk and is collectively working to set ambitious net-zero targets. Delivering on those targets depends on portfolios being deforestation-free. Without this, there is no net zero.”

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