🔎 What’s going on?
In partnership with Legal & General Investment Management (LGIM), PensionBee to launch the UK’s first mainstream fossil fuel-free pension fund.
💰 What does this mean?
Over a third (34%) of PensionBee’s customers of the ‘Future World’ fund responded to a survey asking for a fossil fuel-free pension fund. These customers wanted a fund that truly represented their values, even if that means potential profits from the fund were lower.
The new fossil fuel-free fund will be launched later this year and will exclude oil, coal companies, tobacco investments and weapons makers.
❓Why should I care?
In 2018, the UK’s total private pension wealth was worth £6.1 trillion. L&G themselves have funds worth more than £1 trillion in assets. These numbers are sizable enough to make a huge difference. By focusing on short term profits, the majority of these assets are still continuing to fund fossil fuels keeping them in the market. However, in the long term, they will become ‘stranded assets’. A stranded asset is a resource or equipment that once had value but no longer does, due to external changes or market shocks.
🚦 Where do we need to be?
What PensionBee are launching is a baby step in the right direction. We need a lot more fund managers to follow suit. Reports and high-profile financiers have long warned about the risk climate change poses to pension schemes.
👤What can I do about it?
As an individual you can do two things: 1) Write to your pension fund and ask them to remove companies that have exposure to climate change risk. 2) Move your existing pension fund to a fossil fuel-free pension fund, such as that offered by PensionBee.
If you work for a pension fund then have an open dialogue with your customers and your asset managers about your climate exposure. Here’s some inspiration.
UK parliamentary and local government authorities should also work towards this same objective. Just take some inspiration from the EU.