Green pension 21x more effective than common climate change efforts

UK savers have been urged to make their pension green after research revealed that this was a “staggering” 21 times more effective at cutting carbon footprints than stopping flying, becoming a vegetarian and moving to a renewable energy provider combined.

The analysis, from Make My Money Matter (MMMM), Aviva, and Route2, found that those with an average sized pension pot of £30,000 who moved from a traditional fund to a sustainable option can expect to save 19 tonnes of carbon a year.

Furthermore, the same shift for savers with a larger pension of at least £100,000 could save up to 64 tonnes of carbon, equal to nine years’ worth of the UK citizen’s average carbon footprint.

The impact of switching an average £30,000 pension pot was also compared to the day-to-day lifestyle changes many consumers are making in order to aid in the fight against climate change.

It was found to be 57x more effective than switching to a vegan diet, 20x more effective than driving an electric car, and 40x more impactful than moving to a renewable energy provider.

In light of the findings, the MMMM campaign has emphasised that whilst it was “vital” that individuals continue to take these steps to reduce their climate impact, they must also ensure that their money is complementing these efforts, rather than undermining them.

It argued that there is an “untapped superpower at the disposal of savers across the UK”, urging pension savers to “harness this power” by contacting their pension provider and asking them to achieve net zero emissions.

Make My Money Matter co-founder, Richard Curtis, commented: “We have taken real collective steps in our society to become greener in our day-to-day lives. However, I helped create MMMM after being alerted to the fact that our pensions could be undoing all of our hard work without us even knowing.

“These findings confirm just how important our money is in the fight against climate change. In fact, our pensions are the most powerful weapon we have to help protect the planet.

“We need the entire UK pensions industry to go green – making their default funds more sustainable so all savers can have a pension to be proud of.

“As individuals, we have a critical role to play in driving this change by showing providers that we want our money invested in a way that does good, not harm and, so that we can retire into a world that isn’t on fire.

“That’s why we are calling on all UK savers to take the 21x challenge and ask their provider to go green in 2021, meaning that their scheme is committed to urgent carbon reduction targets, halving emissions this decade, and actively investing in solutions that help save our planet.”

Aviva UK Savings & Retirement managing director, Rob Barker, added: “Pension savings have incredible potential for contributing towards climate goals.

"With over five million pension customers, and as the first major UK financial services company with a plan to meet net zero by 2040, we take our responsibility very seriously - which is why we commissioned this research.

“We’re excited to be working with MMMM to ensure people have a better understanding of how their pension can be used to create a better future.

“We recognise that many consumers now expect some level of sustainability to be built into whatever they buy. That’s why the investment and pension assets controlled by us are included in our 2040 sustainability ambition - the most demanding target of any major insurance company in the world today.”

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