Pension investments undermining FTSE100 climate efforts

The pension investments of major FTSE100 companies finance seven times more carbon than their UK company emissions, according to research from Make My Money Matter (MMMM) and Scottish Widows.

The research found that although major businesses' are making efforts to operate more sustainability, this is being undermined by the investments within their company pension schemes, financing 131 million tonnes of unreported carbon each year.

Poor awareness is thought to be compounding the problem, as further research from MMMM found that less than half (45 per cent) of CEOs and business leaders know that their company pension scheme could be driving climate change.

In addition to this, less than 10 per cent of FTSE100 companies even mentioned pensions within their sustainability strategies.

MMMM and Scottish Widows argued that this inaction was out of touch not only with the climate emergency, but also with the growing demands of staff who increasingly want their employers to offer more sustainable pensions.

Indeed, new research from Scottish Widows revealed that the majority (72 per cent) of workers want their employer to invest their pension sustainably, while current job seekers also cite this as a top five employer priority alongside flexible working.

The research was highlighted by MMMM and Scottish Widows as an “urgent wakeup call” to all businesses committed to tackling climate change.

MMMM co-founder, Richard Curtis, commented: “This report leaves us in no doubt - pensions are one of the most powerful tools UK businesses have to tackle the climate emergency.  

"For organisations to be acting credibly and decisively on climate, green pensions must be a crucial part of their plans.    

“We hope this report acts as an urgent wake-up call and puts company pensions - and the billions invested by them each year - at the heart of all organisations’ sustainability strategies.

"Doing so will not only help companies tackle climate change, but also send a powerful signal to the pensions industry that it's time we all made our money matter in the historic fight for our planet and the people who live on it."

Adding to this, Scottish Widows head of pension investments, Maria Nazarova-Doyle, suggested that many companies "simply aren’t aware" of how their pension schemes are undermining or even undoing the sustainability progress they are making.

“Today’s workforce expects its employers to take an active stance on social and environmental issues," she continued.

"With the help of providers, business leaders now have real opportunity to unleash the power of pensions as a force for positive change and ensure their employees’ retirement savings are channelled into sustainable portfolios. In doing so they will show staff that they are serious about investing their money responsibly.”

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