12 Oct 2021

Doing good with your money in your corporate pension

One of the worlds biggest challenges (if not the biggest) is tackling climate change.

The Paris Agreement is a legally binding international treaty on climate change, with the goal to limit temperature increases to no more than 2% compared to pre-industrial figures. And to be carbon neutral by 2050.

Currently, Corporate Pension schemes are some of the biggest asset holders in the UK, at the end of 2019, this was estimated as £2.2 trillion, and many of the investments bought by these schemes release carbon.

Although currently not law, there are proposed regulations for trustees of larger pension schemes to maintain oversight of climate issues in their portfolios and disclose the risks to their members. And, ahead of this The Pension Regulator (TPR) is increasing pressure on corporate pension scheme trustees, expecting them to have a ‘statement of Investment Principles’ which covers the need to protect their pension savers from climate risk.

With this, some of the well-known corporate pension providers are getting ‘on board’. With one household name pledging that its corporate pension schemes will target a 65% reduction in carbon by 2030 and being fully net zero by 2050.