UK pensions urged to target net-zero emissions ahead of COP26

26th July 2021


Istock 174545623 0

Related Topics

Related tags

  • Finance ,
  • Investment ,
  • Society

Author

IEMA

The UK's largest defined benefit (DB) pension schemes have received a letter from the Make My Money Matter campaign urging them to set net-zero emission targets ahead of the COP26 climate summit later this year.

The HSBC Bank Pension Scheme and BP Pension Fund are among the DB schemes being urged to halve their emissions before 2030, and reach full net zero by 2050 “at the absolute latest”.

Defined contribution (DC) schemes were approached by the campaign last month, however, it is the DB sector which accounts for the large majority of the UK’s £2.6trn pension industry.

The campaigners called on DB pensions to follow robust criteria, including a rapid exit from all coal investments, and reporting annually on progress while holding themselves to challenging five-year benchmarks.

This comes after the campaign found that 'greening' pensions is 21 times more effective at cutting an individual's carbon footprint than going vegetarian, stopping flying and switching to a green energy provider combined.

“We need all DB schemes to use their enormous pension power to tackle the climate crisis, and urgently reduce emissions,” said Tony Burdon, CEO at Make My Money Matter.

“We know that this approach is good for the planet, protects investments from climate risks and is in line with public demand. That's why now is the moment for all pension schemes to commit to robust net-zero targets, and ensure our pensions are building a world worth retiring into.”

The campaign launched its Green Pensions Charter earlier this year to encourage companies to work with their pension providers and ensure they commit to net zero in the lead up to the COP26.

More than 60 companies, including household names such as Tesco and IKEA have now signed up to the Charter, pledging to invest their pension more sustainably.

Trustees are urged to actively engage with the companies they own and use their voting power on shareholder resolutions. Where engagement doesn’t work, providers should divest from high-emission companies that don’t have credible net-zero strategies or refuse to transition.

Furthermore, pension providers are urged to invest in climate solutions, such as renewable energy and green infrastructure, and draw on international practice frameworks, such as the Net Zero Asset Owners Alliance, when forming and delivering plans to reach net zero.

“To meet the 1.5˚C ambition of the Paris Climate Agreement and tackle the climate emergency, we need our finance industry to move fast,” Burdon continued.

“Pensions are a crucial part of this and, with £2.6trn circulating in the UK sector alone, it is vital that no stone is left unturned.”

Image credit: iStock


Transform articles

National climate plans could see fossil fuel demand peak by 2025

Demand for fossil fuels will peak by 2025 if all national net-zero pledges are implemented in full and on time, the International Energy Agency (IEA) has forecast.

15th October 2021

Read more

Climate change remains one of the top issues most concerning the UK public, despite the economic turmoil experienced over the last 18 months, a poll commissioned by IEMA has found.

15th October 2021

Read more

Almost one-third of Europe's largest companies have now set net-zero emissions targets, but far less are set to deliver on their ambitions.

7th October 2021

Read more

A group of world-leading climate scientists has today warned that carbon pricing is currently too low to deliver a just transition to a net-zero economy, and that "urgent reforms" are needed.

30th September 2021

Read more

The Royal Botanic Gardens (RBG) in Kew has today unveiled a new strategy to tackle biodiversity loss and develop sustainable nature-based solutions to some of humanity’s biggest global challenges.

28th September 2021

Read more

How to Save Our Planet is call to action that aims to equip everyone with the knowledge needed to make change. We need to deal with climate change, environmental destruction and global poverty, and ensure everyone’s security.

23rd September 2021

Read more

Hannah Lesbirel and Beccy Wilson speak to IEMA members about climate anxiety

23rd September 2021

Read more

Seven of the UK's 17 key industry sectors are still increasing their emissions year-on-year, and most will miss their 2050 net-zero targets without significant government action, new research suggests.

23rd September 2021

Read more

The UK government’s former chief scientific adviser Sir David King talks to Chris Seekings about his career, the latest IPCC report, COVID-19 and COP26

23rd September 2021

Read more

Media enquires

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

Find an expert