Sustainable Pensions: Make Your Money Count

By Tamsin Morris.

If we’re honest, pensions aren’t really a topic that raises much enthusiasm. But just because they don’t interest us, that doesn’t mean we shouldn’t be paying attention to them.

Clearly, some of that attention is going to need to focus on whether they will provide us with income in retirement. But as CIEEM members, we should also be looking at their impact in a broader sense.  Globally, pension assets are worth around £68 trillion. That’s a lot of money, which could be working to enhance or destroy our world. A study published in 2021 found that turning your pension green can be 21 times more effective at cutting carbon footprints than stopping flying, becoming a vegetarian and moving to a renewable energy provider combined. So, dull though it may be, it has to be something that we should all be considering.

The Action 2030 working group was set up by CIEEM to help the Institute reach net zero carbon emissions by 2030. The group felt that part of that work should include a consideration of the pension investments being made on behalf of CIEEM staff and we asked CIEEM to investigate how and where their pension fund was investing its assets. It turned out to be a more complex and time-consuming process than we expected. So, lesson number one learnt – if you want to know where your pension money is invested, you may need to be persistent.

The initial responses didn’t really give us the answers we were looking to find. The working group felt it was important for the pension provider to be showing clear evidence of seeking to achieve net zero by 2050 or earlier, ideally with some interim milestones set out as well. Be prepared for pension companies to be a bit surprised when you start asking for that level of detail.

Once you’ve pinned down your pension provider and got them to set out their carbon reduction targets, you also need to be sure that their current (and future) assessments of their climate impact are accurate. The best way to do that is to try and find a provider who reports their carbon emissions using a recognised methodology, not just their own ‘back of an envelope’ estimate. You might also find that your pension is invested in various different funds, so its worth seeking fund level data, rather than just aggregated figures.

You can also use independent sources to do some of that research for you. Websites including Make My Money Matter, Ethical Consumer, and Good With Money all benchmark pension providers, enabling you to make an informed choice.

Whilst CIEEM members are probably never going to be thrilled to spend time investigating their pensions, it’s one small action that we can all undertake that just might make a really big difference.

Tamsin Morris CEcol CEnv MCIEEM is a freelance ecologist who is a member of the CIEEM Action 2030 working group.  Having been self-employed for the last 20 years, Tamsin has needed to learn about green investments so she can make sure her own pension is invested for good.