UK pension schemes ignoring climate change responsibilities

18th December 2019

Web ecofinance shutterstock 517257208

Related Topics

Related tags

  • sea ice loss ,
  • Investment ,
  • Stewardship


Kirsten Campbell

That vast majority of the UK's largest pension schemes are failing to directly engage with large investee companies on their role tackling climate change.

After analysing the 16 largest pension schemes, managing over £34bn in assets, ShareAction found that only Nest and TPT Retirement Solutions directly engage with big companies on climate risks.

This is despite new regulations requiring pension funds to publish policies on how they incorporate environmental, social, and governance (ESG) issues in their investments.

It was also found that the majority of large pension funds are delegating responsibility for voting and climate engagement activity to their asset managers.

ShareAction said this is concerning because the new regulations require schemes to have their own policies on stewardship activities, including voting and engagement.

The findings come after separate research found that climate change policies could permanently wipe up to $2.3trn (£1.75trn) off the valuation of the world's largest companies by 2025.

Millions of savers are putting their life savings into the hands of pension funds who are playing a dangerous game with it, said ShareAction campaigns manager Lauren Peacock.

By passing the buck on climate change, they give little comfort that the world and their savings will be protected come retirement.

NOW: Pensions was described as having a “simple policy“ on ESG, showing limited action on responsible investment.

A further eight schemes showed some signs of imbedding ESG into their investments, but limited action on climate change.

Nest, TPT and the People's Pension are the only schemes who go into depth on climate change in their ESG policies, pointing to the need for robust engagement with companies in their portfolios.

The findings also show an increase in ESG funds into master trusts' default asset allocations, but that there are low levels of engagement between schemes and policymakers.

“Younger savers are beginning to connect the dots between their personal finances and their impact on the planet,“ Peacock continued.

“We hope these master trusts sit up and listen to these findings before it's too late.“

Image credit: ©Shutterstock


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.

Transform articles

A social conscience

With a Taskforce on Inequality and Social-related Financial Disclosures in the pipeline, Beth Knight talks to Chris Seekings about increased recognition of social sustainability

6th June 2024

Read more

Disinformation about the impossibility of averting the climate crisis is part of an alarming turn in denialist tactics, writes David Burrows

6th June 2024

Read more

David Symons, FIEMA, director of sustainability at WSP, and IEMA’s Lesley Wilson, tell Chris Seekings why a growing number of organisations are turning to nature-based solutions to meet their climate goals

6th June 2024

Read more

A system-level review is needed to deliver a large-scale programme of retrofit for existing buildings. Failure to do so will risk missing net-zero targets, argues Amanda Williams

31st May 2024

Read more

Chris Seekings reports from a webinar helping sustainability professionals to use standards effectively

31st May 2024

Read more

Although many organisations focus on scope 1 and 2 emissions, it is vital to factor in scope 3 emissions and use their footprint to drive business change

31st May 2024

Read more

IEMA submits response to the Future Homes Standard consultation

31st May 2024

Read more

What is the role for nature in the Climate Change Act? Sophie Mairesse reports

20th May 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close