Green Pensions: A Climate Solution for Business

Green Pensions: Introduction

Welcome, to Play It Green’s weekly business tip, this week exploring the concept of Green Pensions.

The article is aimed at educating and empowering businesses to embrace sustainability step by step and today we shed light on how pensions can play a significant role in fostering sustainability.

As part of the Play It Green community, this content is specifically tailored to inform and empower your business to make informed decisions regarding footprint reduction. Let’s dive in!

Reduce Repair Regive

The Power of Green Pensions to Reduce Carbon Footprints

In an era where concerns about climate change are rapidly escalating, individuals and businesses are increasingly seeking ways to minimise their carbon footprint.

Adopting personal lifestyle changes like embracing a vegan diet, reducing plastic consumption, and using alternative modes of transportation are both impactful and commendable.

However, one of the most impactful actions for carbon emissions reduction lies in reviewing the investment choices of your pension provider.

The UK's Pension Industry and its Potential for Sustainable Impact

The UK’s pension industry boasts a staggering worth of £3 trillion. Not only that but it has an annual investment of £20 billion from businesses and employees. This is according to Make My Money Matter (MMMM).

Established in 2015, MMMM is a campaigning organisation dedicated to transforming the financial system by prioritising the welfare of people and the planet alongside profit.

They advocate for greening corporate pensions and emphasise the crucial role businesses must play in addressing climate change.

A recent MMMM report, “FTSE100 Pensions Emissions,” highlights the often overlooked but potent climate action potential of pensions.

Unveiling the Hidden Climate Action Potential of Green Pensions

The report reveals a startling statistic: company pensions finance carbon emissions seven times greater than the emissions produced directly by the businesses themselves.

Furthermore, the total carbon emissions financed by FTSE100 company pensions amount to approximately 131 million tonnes. Incredibly this is roughly equivalent to 33% of the UK’s annual carbon emissions.

Unfortunately and unsurprisingly, less than 10% of FTSE100 companies incorporate pensions into their publicly available sustainability plans.

As well as this, just 45% of UK CEOs and managing directors recognise the connection between company pensions and climate change.

Call to Action: Greening Pensions and the Importance of Corporate Commitment

In response to these findings, MMMM calls for all FTSE 100 companies to green their pensions and sign up for the Green Pensions Charter.

Companies such as IKEA, Octopus Group, EY, Brewdog, BAFTA, as well as charities such as Oxfam, Save The Children and WWF have signed up to show their commitment.

This movement aligns with the growing trend of institutional investors, particularly pension funds, prioritising environmental, social, and governance (ESG)-driven investment products.

By 2025, ESG-labelled assets are expected to represent approximately one-third of all managed assets, a significant transformation in the investment landscape.

Green Pensions: Conclusion

Each step we take on this journey of reduction leads us closer to a more sustainable future and green pensions can help businesses take a big step.

As part of the Play It Green community, businesses are encouraged to embrace the power of green pensions to strengthen their sustainability credentials and actively combat climate change.

While challenges such as greenwashing and the need for greater transparency persist, the demand for ethical and sustainable investments continues to grow.

By directing the £20 billion annually invested in UK pensions towards ethical funds, businesses can make a tangible impact. Not only that but they will contribute to creating a better world for future generations.

Let’s seize this opportunity and champion the cause of green pensions, knowing that our collective efforts will pave the way for a brighter and more sustainable tomorrow.

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