People can support the new zero carbon economy by investing their pension sustainably.
This is according to Guy Opperman, minister for pensions and financial inclusion. He contributed to a series of essays published by the think tank Social Market Foundation and the Chartered Banker Institute. The essays examine the role of financial investments in reaching the UK’s target of net zero carbon emissions by 2050.
Guy Opperman calls on individual savers to review their pension to see if it is being invested in low-carbon businesses rather than fossil fuels or other environmentally damaging industries, and in doing so encourage businesses to pursue environmentally friendly operations.
In the UK, workers saved £90bn into their pension schemes in 2018, with the automatic enrollment of employees into pension schemes from 2012 creating 10 million new pension savers.
According to The Money Advice Serivce, if you have a personal or stakeholder pension or pay into a workplace defined contribution scheme, you will typically be able to decide how your money is invested, with most pension providers normally offering a range of investment strategies, with money invested in a default fund if no choice is made.
Opperman said that individuals should “engage with their pensions and encourage sustainable investments” in order to “play their part” in reaching the net zero goal.
Simon Thompson, chief executive of the Chartered Banker Institute, said:
“As contributors to our essay series rightly argue, mainstreaming green and sustainable finance requires a raft of substantial and significant changes right across our financial system, and indeed in business and society more broadly. I am sure they will spark some interesting debate, but we need to move from talk to ambitious policy, regulatory and industry action in the 12 months from now to COP26.
“The finance profession and finance professionals must play key roles alongside governments in leading the systemic change we need to protect people and planet.”