Over £300bn of invested pension money linked to deforestation

Over £300bn of UK pension money is invested in companies and financial institutions with high deforestation risk, according to joint research by Make My Money Matter (MMMM), SYSTEMIQ and Global Canopy.

MMMM estimated that pension holders could unknowingly invest over £6,500 in companies that are – directly or indirectly – helping destroy natural ecosystems and habitats, drive climate change and impact indigenous communities.

Its estimate was based on an average defined contribution pension pot of £30,000 containing 70 per cent public equity and corporate bonds.

Polling commissioned by MMMM revealed that 77 per cent of pension holders would be unhappy to discover that their savings were contributing to deforestation.

Links to deforestation are savers’ top concern when it came to their pension investments, according to the research, surpassing worries around fossil fuels, labour rights violations and weapon manufacturing.

Indeed, it found that that 27 per cent of people would switch to a more sustainable provider if they discovered that their money was driving deforestation, equivalent to 14 million people in the UK.

Meanwhile, 3.2 million people would reduce their pension contributions if they found their money was linked to the practice.

MMMM co-founder, Richard Curtis, commented: “There’s an old saying: ‘If a tree falls in the forest, and no-one hears, does it actually make a sound?’ Suddenly this old saying has become one of the world’s most important questions.

“Because while we may not see the forests falling or hear the trees crashing, we are all connected to deforestation. We’re connected as consumers, as citizens, and as this report powerfully highlights, as pension holders too.

“Because it’s our money – managed through our pensions – that’s being invested in companies driving deforestation, damaging the environment, and threatening lives and livelihood across the planet. But it doesn’t have to be this way.

“If pension funds commit to cutting deforestation from our portfolios – and our money is cleverly and massively applied to support the industries and business that are restoring, not jeopardising, our natural environment – both profits and the planet can come out on top.

“That’s why now is the moment to make our money matter and to cut deforestation from our pensions for good. Now is the moment to hear the tree falling in the woods and take heroic action to protect our planet.”

Global Canopy executive director, Niki Mardas, added: “It has been too easy for pension funds to turn a blind eye to the deforestation risks hidden in the investments they make on our behalf.

“Those risks are hidden in the complex supply chains, often ignored by the companies involved.

“But savers are clear: none of us want our money to be financing deforestation – and with it, climate change, extinctions and impacts on local people.

“Now fund managers have no excuse not to act. The information they need to identify where the risks lie is available. It is time to listen to their customers and act”.

With an estimated 30 football fields of forest lost every minute – and an area the size of London destroyed every week, MMMM called on pension schemes to listen to the views of their members by committing to deforestation free portfolios.

    Share Story:

Recent Stories

Sustainable investing for DC schemes
Laura Blows discusses sustainable investing for defined contribution plans with BlackRock head of UK & MEA global consultant relations, Claire Felgate, in Pensions Age’s latest video interview

Spotlight on Emerging Markets
Francesca Fabrizi talks emerging markets with Polar Capital’s head of Emerging Markets & Asia, Jorry Nøddekær, exploring the opportunities for pension funds in the current global setting

The latest in multi-asset credit
Laura Blows discusses the high-yield market and multi asset credit with Royal London Asset Management senior fund manager, Khuram Sharih
Pension portfolios – the role of asset-backed securities
Laura Blows is joined by Royal London Asset Management (RLAM) head of sterling credit research, Martin Foden, and its Senior Fund Manager, Shalin Shah to discuss the role of asset-backed securities (ABS) within pension fund portfolios