Pensions - Articles - DWP confirms plans on pensions climate change disclosure

 “Pensions are an obvious target for environmental campaigners because of their sheer scale. Total private pension wealth in the UK is estimated to be north of £6 trillion, while automatic enrolment is bringing millions of new savers into the system.

 “Many of these new savers, particularly younger generations, would rather their money be invested in a way which doesn’t damage the planet. If pension investments can be marshalled effectively, it could fundamentally shift the way companies seeking that valuable investment behave.

 “To that end, the DWP has rubber-stamped proposals which will require big occupational pension schemes to show members the extent to which their investments are aligned with the Paris goals of limiting global temperature rises to 1.5°C above pre-industrial levels.”

 “One of the key challenges will be ensuring the plans don’t result in a blanket anti-emissions approach being taken by pension schemes. Encouraging businesses operating in high emissions sectors who are making genuine efforts to reduce those emissions, for example, could be just as valuable as boosting firms that are already ‘green’.

 “In reality, these new rules will simply codify something that is already happening in response to growing demand from investors.

 “Over the longer-term we expect savers to take a much keener interest in how and where their retirement pots are invested, so there is every chance firms will need to go above and beyond these requirements to satisfy members.”