Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • News

UK pension funds driving more CO2 emissions than most countries

Open-access content Wednesday 27th October 2021 — updated 9.56am, Thursday 28th October 2021
UK pension funds driving more CO2 emissions than most countries

The UK's pensions industry would find itself in the top 20 national carbon emitters if it were a country, according to analysis by the Make My Money Matter campaign.

The findings show that, for every £1,000 invested by pension schemes, around £60 is invested in the fossil fuel industry, equivalent to £112bn.

This is enabling the release of approximately 330 million tonnes of carbon every year, exceeding the UK’s entire annual CO2 emissions of around 326 million tonnes, which would require half of the country’s landmass to offset.

This comes after separate research earlier this month revealed that 70% of leading schemes have not made robust net-zero commitments, leaving almost £2trn invested in schemes which are not aligned with the Paris Agreement.

Ahead of next month's COP26 climate summit, the Make My Money Matter campaign is calling on the government to make net zero mandatory for all schemes, building on the recently announced Sustainability Disclosure Requirements. 

Film director and co-founder, Richard Curtis, said: "With pensions enabling emissions which exceed the UK’s entire CO2 output, the message couldn’t be clearer: the time for green pensions is now. 

“If we fail to lower the emissions of our pensions, we will fail to prevent the worst effects of catastrophic climate change, jeopardising the very futures our pensions should be saving for.

“With COP26 just days away – the most important climate talks of our generation – we must put our pensions industry to work on tackling climate change by lowering their emissions, and using their pension power to transform the companies they invest in.”

The latest analysis of investments excluded derivatives, cash, cash equivalents and other unclassified assets, focusing instead on public equity, private equity, government bonds, corporate bonds, and other debt, covering £1.9trn in assets.

To calculate the carbon emissions of the UK pensions industry, the researchers carried out both a bottom-up and a top-down analysis of emissions – averaging the two for a final estimation. 

Daniel Dias, Founder at Route 2, which co-produced the research, said: “While pension funds do not directly produce significant greenhouse gas emissions, the way they allocate their capital has a significant impact on the long-term behaviour of the companies and countries they invest in. 

“Our analysis has shown that, because of the vast sums of money that they are responsible for, the levels of greenhouse gas emissions that they have influence over is significant. 

“It also demonstrates that selecting pension schemes that are more climate sensitive is an effective tool in combatting climate change.”

 

Image credit: iStock

Author: Chris Seekings

Filed in:
News
Topics:
Investment
Pensions
Environment

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ