Download Frequently Asked Questions

Green Light Campaign: Frequently Asked Questions
What do pension funds have to do with climate change?
When you put your money into a pension, it doesn’t just sit there. That money is invested in a
whole range of options, including company shares, bonds, property, infrastructure etc. Our
pension funds currently have around £3 trillion invested in them by us, and the decisions they
make about where to put that money shapes the health and nature of our economy. If we want
to protect our planet, we need to call on our pension funds to start making climate-aware
decisions about how they invest our savings.
Why not just demand that the oil, gas and coal industries clean up their act
directly – why focus on pension funds?
There are two reasons why we think using pension power to tackle climate change is the most
effective method. Firstly, because money talks: our pension funds have around £3 trillion of
savers’ money invested in them, and a significant portion of that money is invested in
company shares. As shareholder owners, they have the power to demand greener, cleaner
company behaviour.
Secondly, if we go directly to fossil fuel companies, we are only addressing one of the factors
contributing to climate change. Instead, we need to take a holistic approach. This means
addressing not only fossil fuel companies, but also encouraging green investments,
demanding targeted climate action plans from our pension providers, and calling for
government policies that enable the low carbon transition.
How can I find out what my pension provider is investing in?
Some pension providers publish a list of their ‘equity holdings’ (the companies that they hold
shares in) either online or in their annual report. These lists can vary from just their top 10
holdings to a comprehensive list. Pension providers don’t only invest in company shares. They
also put our savings into other types of investments including bonds, property, infrastructure,
and private equity. They may share some information about these other investments on their
websites too. If your pension provider doesn’t publish any of this information, you can contact
them and ask them directly.
Is my pension provider under any obligation to tell me what my money is
invested in?
Legally, it is not under any obligation to tell you what your money is invested in. However,
some pension providers do make some or all of this information available. If your pension
provider isn’t one of them, we think you have a right to ask for more information. If it
continues to be reluctant to tell you where your money is going, we think it should be able to
provide a robust reason why.
There is currently EU legislation that ensures that every saver who is taking an investment
risk (i.e. anyone not in a final salary scheme) does have the right to access this information,
and although this has not yet been implemented into UK law, it does mean that savers have
ample grounds to push for meaningful answers to questions about where their money is
going.
Can I move my pension into an ethical pension fund to make sure that my money
won’t fund fossil fuels?
Realistically, it is fairly difficult to move your pension fund (although a small number of
employers will allow it). However, most pension providers should offer an ethical investment
option. This can ensure that your money isn’t invested in a variety of ‘unethical industries’
such as tobacco or arms. You may also be able to select options that either positively or
negatively screen for climate change considerations. This means that they seek to invest in
companies involved in positive climate-related industries (e.g. carbon offsetting, renewable
energy, green infrastructure); or choose to screen out those with negative impacts on our
climate (e.g. lots of greenhouse gas emissions).
However, moving your pension fund isn’t necessarily the best method for creating change. By
keeping our money in mainstream funds, we keep the power to call for change. We need
mainstream funds that aren’t specialist ethical/green funds to start considering their
investment decisions in the light of climate change. We need it to become normal practice for
our pension providers to increase the amount of money they put into green investments and
for them to demand cleaner projects and strategies from fossil fuel companies.
What are ‘green investments’?
Broadly, they’re the investments needed to create an efficient, clean, and prosperous low
carbon economy. That includes all low carbon goods and services, as well as the processes and
technological advances that will allow our energy and resources to be used more efficiently.
The green investment landscape is very wide, spanning renewable energy, energy efficiency,
transport, agriculture, water and waste management, and recycling. It’s a vital and growing
sector in the UK economy.
Why aren’t pension funds doing anything about the risks of climate change?
Some already are. A number of global and UK pension funds have developed policies to
manage the risks of climate change, and are turning these policies into action. Some best
practice examples can be found where pension funds are: setting targets to reduce their
exposure to carbon risks; engaging with carbon intensive companies to stimulate changes to
business strategy; investing in climate solutions; getting rid of high carbon, risky investments;
engaging with policymakers; and opting for stock-market indices that are designed to lower
exposure to carbon risks while still maintaining returns.
However, many have yet to act. Climate change presents a new and uncertain risk to pension
providers. They need to hear from us, their savers, that this issue matters to us and that we
want action. To really achieve change at the scale we need, the investment practices listed
above need to trickle down from the leaders into the entire mainstream pensions industry.
I don’t have a pension but I want to get involved, what can I do?
Spread the word! You can follow @shareactionuk on Twitter, or like us on Facebook. Share
the message of our campaign across these platforms, and email friends, family and colleagues
to let them know.