Pension schemes urged to set net-zero targets ahead of COP26
More than 80 defined benefit (DB) pension schemes have been urged to align with the Paris Agreement by aiming to reach net-zero emissions by 2050 at the latest while also ensuring a rapid exit from coal investments.
Ricard Curtis’s Make My Money Matter campaign has this week written to more than 80 DB pension schemes, including those associated with Exxon, Vodafone, BP, Barclays and the BBC.
The letter outlines that these schemes do not yet have targets in place to align with the net-zero movement, which would include a commitment to halving emissions by 2030. Make My Money Matter is calling on the DB pensions to follow the likes of BT’s pension scheme by committing to net-zero ahead of COP26 in November.
Make My Money Matter calls on the pension schemes to match the 1.5C ambition of the Paris Agreement and commit to delivering a rapid exit from all coal investments.
The organisation’s chief executive Tony Burdon said: “After reaching out to DC master trusts last month, we are broadening our focus to include the DB sector, which accounts for the large majority of the UK’s £2.6trn pension industry. These schemes have extraordinary power to help tackle the climate crisis and protect savers’ investments, but many have yet to respond to growing demand for cleaner, greener pensions. To meet the 1.5C ambition of the Paris Climate Agreement and tackle the climate emergency, we need our finance industry to move fast. Pensions are a crucial part of this and, with £2.6trn circulating in the UK sector alone, it is vital that no stone is left unturned.
“This is why we need all DB schemes to use their enormous pension power to tackle the climate crisis, and urgently reduce emissions. We know that this approach is good for the planet, protects investments from climate risks and is in line with public demand. That's why now is the moment for all pension schemes to commit to robust net-zero targets, and ensure our pensions are building a world worth retiring into.”
The letter follows on from the creation of Make My Money Matter’s ‘Green Pension Charter’, convened in partnership with community coalition Count Us In. Signatories to the charter include EY, Ikea, BrewDog, Ramboll UK, Ella’s Kitchen and Triodos Bank.
The Charter commits signatories to ensure that their pension schemes are “not investing in industries that harm our planet” by the time that COP26 takes place this November. Make My Money Matter’s primary focus is on fossil fuel divestment, but the Charter also covers businesses in other sectors with high environmental impact. For example, mining and extractives firms with no clear transition plans would be excluded under the Charter’s definition.
Transition plans, the Charter states, should clearly outline how projects receiving finance will align with net-zero by 2050 at the latest.
The aim of the Charter, beyond accelerating action and increasing ambition among the 50 first signatories, is to encourage a wider shift across the pensions sector. Since it launched last year, Make My Money Matter has urged individuals and businesses to press their pension schemes to improve climate commitments and enhance emissions disclosure, leading to new pledges from the likes of Smart Pension and Brunel Pensions Partnership.