Mortgage & Property

New Insurance Professional

Family Office Bulletin


Mortgage Property

Insurance Professional

Family Office

Pensions industry enables more CO2 emissions than entire UK carbon footprint.  

Schemes fund an estimated 330 million tonnes of carbon emissions every year.

  • If the UK pensions industry was a country, it would find itself in the top 20 carbon emitters globally.

  • To offset its emissions, the industry would need to reforest 50 percent of the UK’s entire landmass.

  • Pension schemes are estimated to invest £112 billion into fossil fuels or £60 for every £1,000 invested.

  • Make My Money Matter is calling on Government to make net zero mandatory for pension funds atCOP26 to drive urgent emissions reductions.

The investments of UK pension schemes enable the release of 330 million tonnes of carbon every year according to analysis by Make My Money Matter and sustainability research house Route2. The output exceeds the UK’s entire annual CO2 emissions* – and would require half of the UK’s landmass to offset.

With COP26 just around the corner, Make My Money Matter – a campaign founded by acclaimed filmmaker and activist Richard Curtis – has highlighted the central role our pensions play in financing global emissions. These findings reveal that our nation’s retirement savings are driving the climate crisis even more than anticipated and highlight the critical role of pensions in meeting the UK’s net zero targets.

Route2’s findings further reveal how our pension industry fuels the climate crisis through investments in the worst polluting companies. In fact, for every £1,000 invested by UK schemes, £60 is estimated to be invested in the fossil fuel industry.

While many have begun to take climate risk more seriously, with around £800 billion in schemes now committed to robust net zero, voluntary commitments are not going far enough. Earlier research from Make My Money Matter this month revealed that 70% of leading UK schemes have not made robust net zero commitments, leaving almost £2 trillion invested in schemes which are yet to align with the Paris Climate Agreement,

To urgently address this challenge, and compensate for the slow uptake of voluntary commitments, Make My Money Matter is calling on UK Government to make net zero mandatory for all UK schemes and providers at COP26, building on the Chancellor’s recently announced Sustainability Disclosure Requirements.

Only with such regulatory action will we be able to act with the speed and scale needed to significantly reduce the emissions of our pensions industry and limit global warming to the all-important 1.5-degree target.

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

When you think about pensions, you hardly ever think carbon emissions. But our report turns that on its head. With pensions enabling emissions which exceed the UK’s entire CO2 output, the message couldn’t be clearer: the time for green pensions is now. Because if we fail to lower the emissions of our pensions, we will fail to prevent the worst effects of catastrophic climate change; jeopardising the very futures our pensions should be saving for.

So, with COP26 just days away – the most important climate talks of our generation – we must put our pensions industry to work on tackling climate change by lowering their emissions, and using their pension power to transform the companies they invest in.

While we’ve seen green shoots of progress with voluntary net zero commitments, £2 trillion remains in schemes which have failed to act, undermining the UK government’s own net zero targets. That’s why we believe it’s time for the government to make net zero mandatory for all pension schemes, and make sure the trillions in our pensions helps tackle the climate crisis, not fuel the fire.

“In doing so, we can lead the world on sustainable finance, take advantage of the enormous opportunities of the green industrial revolution, and ensure that everyone, everywhere, has a pension to be proud of.”

Daniel Dias, Founder at Route 2 commented:

“While pension funds do not directly produce significant greenhouse gas emissions, the way they allocate their capital has a significant impact on the long-term behaviour of the companies and countries they invest in. 

“Our analysis has shown that, because of the vast sums of money that they are responsible for, the levels of GHG emissions that they have influence over is significant. It also demonstrates that selecting pension schemes that are more climate sensitive is an effective tool in combatting climate change.”

This Week’s Most Read

  • Investing for the year ahead: eight funds and investment trusts for 2022

    The year end is a natural time for people to review their investment portfolios and ensure it is well positioned for the year ahead. Ryan

  • Is your art in the right place?

    By Arthur Byng Nelson, Solicitor and Legal Director at law firm Harold Benjamin. Introduction: Clients with Art For some wealthy individuals a great deal of

  • SJP celebrates its 1000th Chartered Financial Planner

    St. James’s Place (SJP) celebrates surpassing its 1000th adviser to achieve Chartered status. Former law graduate, Molly O’Donnell, came into SJP via the Academy and,

  • Invesco: Outlook for ESG in 2022

    By Cathrine de Coninck-Lopez, Global Head of ESG at Invesco. I have every reason for optimism in 2022. There is clear progress in the environmental,

  • Silent Cyber: a threat for financial advisers?

    By Chris Davies, Executive Director & Co-Lead of IFA Business Unit at Howden The way many of us work has seen a fundamental shift since

  • 7IM partners with Door to strengthen regulatory and stewardship strategies

    7IM today announces that it has partnered with Door, a company dedicated to improving due diligence processes, in a move that will assist the firm

  • Selling the family-owned business: Key considerations for families looking to sell and protect the family legacy

    By Richard Lane, partner in the Corporate and Family Business team at leading law firm Farrer & Co. For a family business owner, the smooth

  • AJ Bell Active v Passive Report 2021

    Only a third of active equity funds (34%) beat a passive alternative this year, according to our latest Manager versus Machine report Active outperformance was

  • The Fall and Rise of Structured Products

    In this episode Ian Lowes, the founder of Structured Products Review, speaks about why the pre-packaged investment strategy is so misunderstood, and how so many

  • Square Mile Academy of funds report ratings round up for November

    Five new ratings, including three Responsible ratings One rating upgraded One fund reintroduced to the Academy of Funds Analysts at Square Mile Investment Consulting and

Keep updated on the most important financial events 

Make sure you are an informed

wealth professional..

Adblock Blocker

We have detected that you are using

adblocking plugin in your browser. 

IFA Magazine