In an initiative launched by celebrity film director Richard Curtis and ex-Bank of England governor Mark Carney there is a new campaign to get pension funds to support investments in climate change. Tanya Jefferies explains in an article on the Thisismoney website. Are we seeing similar developments in other countries?
Mark Carney and Comic Relief’s Richard Curtis launch campaign to invest Britain’s £3trillion pension savings in tackling climate change
Pension funds are being urged to invest the nation’s savings to help fight the climate emergency.
In an initiative launched by celebrity film director Richard Curtis and ex-Bank of England governor Mark Carney, the Make My Money Matter campaign wants the £3trillion in UK retirement pots used to take on climate change.
Carney has previously warned pensions funds and other businesses risk seeing assets become ‘worthless’ unless they wake up to the climate crisis.
He said in December before leaving the Bank of England that efforts to halt investment in fossil fuels were ‘not moving fast enough, and climate change was a ‘tragedy on the horizon’ for the planet but would also have enormous costs for businesses which failed to adapt.
Now, in a new role as UN special envoy for climate action and finance, Carney says supporting an economic transition could be ‘the greatest commercial opportunity of our time’.
Curtis, co-founder of Comic Relief, is calling on the pension industry to commit to net-zero carbon emissions by 2050, and for the Government to ensure that funds report on their progress on sustainable investing.
New research from Make My Money Matter shows 57 per cent of UK adults with a pension want to see their savings invested in building a better future for people and the planet after the coronavirus pandemic, and 52 per cent want them used to help tackle climate change.
The survey of nearly 4,500 UK adults in early June also detected a change in attitudes, with 32 per cent saying they now care even more about the impact their pension has compared with at the start of the crisis.
However, 72 per cent either do not believe or do not know whether their pension is invested in line with their values, and 24 per cent don’t know how to change what their pension is invested in – find out here.
Carney says: ‘By helping align finance with society’s values, the Make My Money Matter campaign can support the whole economy transition required to achieve net zero.
‘This could turn the existential risks from climate change into the greatest commercial opportunity of our time.
‘Private finance, including pension funds, will provide the $3.5trillion needed annually for investments in sustainable infrastructure and fund the innovation and re-engineering of business in every sector of the economy.’
Make My Money Matter is also supported by NEST, the state-run auto-enrolment pension scheme, which has seen its ethical fund outperform its default fund – which savers are opted into unless they make an active choice – for five years running.
NEST chief executive Helen Dean said: ‘At NEST we exist to improve the retirements of our millions of members and we simply cannot do this if we ignore the world they will be retiring into.
‘Pension funds are investing more than £3trillion on behalf of UK workers. That gives us enormous power and influence over the companies we’re investing in. It gives us the potential to be a real force for good.’
Richard Curtis, co-founder of Make My Money Matter, says: ‘Our pensions are powerful, and we must use that power to build a better world.
‘The £3trillion in our UK pension pot is more than enough to take on the climate emergency, bring hundreds of new drugs to market, or help solve the housing crisis.
‘But from tobacco to fossil fuels, gambling to deforestation, pension funds have invested trillions on our behalf without asking us the crucial question – do these investments create a world that we actually want to live in?
‘That is why Make My Money Matter will help people understand their ‘financial footprint’, and empower us all to have pensions we can be proud of.’
What does Mark Carney say about pension funds and climate change?
The former Bank of England governor warned before leaving his post that some assets could become ‘worthless’.
He believe institutional investors ‘have to make the judgment and justify to the people whose money it ultimately is’.
In comments reported by the Daily Mail at the time, he suggested pension funds need to make the argument about why they haven’t divested from fossil fuels ‘if a substantial proportion of those assets are going to be worthless’.
‘If we were to burn all those oil and gases there’s no way we would meet carbon budgets,’ he said.
‘Up to 80 per cent of coal assets will be stranded, [and] up to half of developed oil reserves.’
Carney added: ‘A question for every company, every financial institution, every asset manager, pension fund or insurer: What’s your plan?’