News and Analysis | Author: David Macdonald | November 9, 2022
COP27 and the power of pensions in the fight against climate change
COP27 is under way in Egypt, with world leaders coming together to accelerate efforts to confront the climate crisis.
Last year’s conference saw a number of pension funds and asset managers committing to net-zero emissions targets by 2050, or even sooner. 12 months on from COP26, how much progress has been made?
Make My Money Matter has this week published its 2022 Climate Action Report to time with COP27, which answers this question. Unfortunately, the findings aren’t good. The report finds that:
- 60% of the top 20 workplace pension providers haven’t published any short-term emission reduction targets
- Only four out of the top 20 are committed to removing deforestation from their portfolios
- 50% do not have explicit voting policies aligned to achieving global temperature goals.
- None have explicit policies aiming to end fossil fuel expansion
The report concludes that pension funds are falling short on climate action, and not acting with enough urgency or ambition to tackle the climate crisis.
£3 trillion is invested in UK pensions. This money could be used to invest in vital climate solutions, diversifying and cleaning up energy and infrastructure. Instead, much of it is propping up the harmful industries like fossil fuels, oil and gas and deforestation that are responsible for pushing us ever closer towards catastrophic climate change.
The pensions industry has a central role to play in the fight against climate change, so that we have a future worth retiring into. But it is failing. And for the industry to deliver on climate action, it needs Government support.
Whilst we watch developments at COP27 with interest, we can’t rely on governments to safeguard the future of our planet with the urgency needed. The climate crisis is upon us right now. As UN Chief António Guterres puts it, “we are on a highway to climate hell with our foot on the accelerator.” If we want to make a meaningful difference, we must take individual action.
What can you do?
At Path, we believe that people have more power than they realise. We must use our consumer choice to accelerate the required pace of change and mobilise our money to influence better outcomes. COP27 draws attention to the issue of climate change and helps to keep up momentum on tackling it. It’s a good opportunity to think about doing the right thing with your finances.
If you want to invest sustainably, we can help. Our focus is solely on helping people to invest their savings in the very best environmental and ethical innovators – renewable energy, clean water, recycling, education, healthcare and more. We help to ensure your financial security, while your money is helping to build a better and more sustainable world for everyone.
If you’re a business leader, you might see COP27 as an opportunity to promote your company net zero policies or talk about how you are reducing your carbon footprint. However, if you are overlooking your workplace pension scheme, you could be undermining those positive steps by funding fossil fuels, oil and gas, and other polluting industries.
Our Green Pension Pledge is a way of easily making the switch to a truly sustainable workplace pension scheme. By signing up, you are showing that you are taking climate change seriously, and you’ll be helping your employees to have a significant impact on the world with their savings. If you are an employee, you can even enter your company’s details on our website to have details of the Green Pension Pledge scheme sent to your business for awareness and consideration, anonymously.
Find out more about our Green Business Pledge here.
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