‘Green’ pensions are desired by more than half of savers, a poll shows

More than half of workers will opt for a ‘green’ pension if their scheme makes one available, a new poll reveals.

Around 21million out of 40.7million pension holders want to invest their retirement savings to combat the climate emergency, it found.

The research was carried out by Make My Money Matter, an initiative launched by celebrity film director Richard Curtis and ex-Bank of England governor Mark Carney, who want the UK’s retirement pots to be used to tackle climate change.

Its survey also found that 16 per cent, equivalent to 6.5million people, plan to switch to a sustainable pension over the next 12 months.

Typically, about nine out of 10 people investing in a work pension tend to stick with their scheme’s ‘default’ fund rather than actively choose their own, but the poll suggests that people’s priorities might have shifted.

MMMM believes that awareness of the link between pension investing and climate change has soared in the past year, and meanwhile many top firms have now signed up to its goals.

It says around £1trillion of UK pension assets are in schemes that have set robust net zero targets in line with the Paris Climate Agreement, while £1.7trillion remains in schemes that have yet to respond.

Some 70 per cent of schemes have not set strong enough climate targets yet, it claims. 

The campaign regards a ‘robust’ commitment as a target of limiting global warming to no more than 1.5 degrees Celsius above pre-industrial levels, an interim carbon emissions reduction of 50 per cent by 2030, and net zero emissions by 2050.

Today, Scottish Widows, which looks after nearly £190billion of savings for more than six million people in the UK, revealed plans to achieve a net zero investment portfolio by 2050.

This includes increasing its investment in Blackrock’s Climate Transition World Equity fund from £2billion to £5billion, and investing up to £25 billion into companies showing leadership on decarbonisation and climate solutions.

It also plans to exclude high carbon investments at high risk of becoming ‘stranded assets’ – meaning they could suddenly tank in value – and put pressure on companies failing to address climate change risks.

Maria Nazarova-Doyle, head of pension investments and responsible investments at Scottish Widows, says: ‘Controlling trillions of pounds worth of investments, the pensions industry has a responsibility to act as a responsible steward for the success of climate solutions – and to exclude investments in high-carbon companies which are resistant to change.’  

Make My Money Matter welcomed the news that Scottish Widows was ‘turning their ambitious net zero commitment into a practical plan of action’. 

The campaign found 52 per cent of people would choose a green pension if their provider offered one. 

But it says appetite is strongest among younger generations, with 67 per cent of pension holders aged under 34 wanting a green pension, and 36 per cent planning to switch to sustainable investments in the next 12 months.

MMMM surveyed just over 2,000 people in January. Co-founder Richard Curtis says the research shows the public has woken up to the power of their pensions.

‘More and more savers can see the links between their money and catastrophic climate change, and as a result are determined to make their money matter.

‘Now is the time for the pensions industry to respond to this growing demand for cleaner, greener pensions. In doing so they will be listening to the voices of their members, while ensuring our pensions are building a world fit for our retirement.

‘Last year, we saw £1trillion of our pensions committed to robust net zero targets. But this is nowhere near enough. We need to see the remaining £1.7 trillion working to tackle climate crisis, not fuel the fire.’