Earlier analysis by the campaign group and sustainability research house Route2 showed that the investments of UK pension schemes enable an estimated 330 million tonnes of carbon to enter the atmosphere every year – more than the UK’s entire national carbon output.
This lack of awareness among CEOs and business leaders is also reflected in the sustainability plans of FTSE100 companies. Further research by Make My Money Matter shows that only 8 of the FTSE100 mention their company pensions in their public sustainability strategies, despite the investments of their scheme potentially being one of their most significant climate impacts.
The failure of businesses to recognise the climate impact of corporate pensions represents a significant omission for business leaders. This inaction is also at odds with a growing trend to set wider climate targets for overall corporate activity. With just a small minority including company pensions in their sustainability plans, many risk contradicting their wider sustainability goals and further driving the climate crisis.
Earlier research, conducted by Make My Money Matter, Route2 and Aviva highlighted the power of pensions, showing that greening your pension is 21x more powerful at cutting your carbon than giving up meat, stopping flying and switching to a renewable energy provider combined. Despite this potential, less than half (44%) of CEOs plan to explore a more sustainable company pension in the next twelve months.
Make My Money Matter is calling on businesses to bridge this gap between corporate sustainability pledges and company pensions by calling on their pension providers or trustees to provide their staff with net zero aligned pensions. By doing so, they can use the power of their pensions to accelerate global action on climate.
Commenting on the research, Richard Curtis, Co-Founder at Make My Money Matter said: “Businesses have rallied to become more sustainable over recent years, however, many are failing to use one of the most powerful tools at their disposal – their company pensions. With £20bn invested each year through these company schemes, the potential of this money is extraordinary.
Make My Money Matter wants all businesses to harness the hidden superpower of their pensions and align their company schemes with their corporate sustainability plans. That way, they can put their money where their mouths are on sustainability, while ensuring their pensions are building a world their employees actually want to retire in.”
Jacinta Dillon, Partnerships Manager at Make My Money Matter commented: “Even the most glittering sustainability strategies can be undermined if the investments of company pension schemes continue to pump money back into the very system driving the climate crisis. Greening a workplace pension scheme is one of the most impactful steps a business can take, both for the good of the planet, and to reflect the views of their employees who want their money building a better world.
“Our research shows that the business sector has a big sustainability blind spot - their pensions. While some may be working with their pension scheme behind the scenes to invest more sustainably, Make My Money Matter wants businesses to put this action at the heart of their sustainability strategies. That way, they can make sure that all their hard work on sustainability isn’t being undone, as well as mounting further pressure on the pension industry to change.”
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