Guy Opperman has written to 50 of the country’s biggest pension funds - between them representing half of all assets – to remind them of their responsibilities.
Since the beginning of the month, pension schemes with more than 100 members have had to disclose the risks in their investments, including the ones arising from environmental, social and governance considerations.
Mr Opperman said: “Pension funds are a powerful weapon in the fight against climate change. Despite some good work by a number of schemes, some are not acting. We need urgency on this vital issue from trustees and investment managers.
“New regulations came into force last week, I’m demanding that the remaining pension schemes and the fund managers they appoint stop shuffling their feet.
"They must meet their responsibilities to savers now and in the future, and to protect the future of the planet.”
Mr Opperman also asked the schemes to provide the ESG, stewardship and members’ views sections of their statements of investment principles, so that he can compile a record in order to monitor compliance and highlight best practice.
According to Lorna Blyth, head of investment solutions at Royal London, ESG factors are increasingly in the spotlight, with issues such as climate change, diversity, and single-use plastics making headlines.
She said: “This move by the pensions minister sets a clear direction of travel from government and policy makers.”
Caroline Escott, policy lead for investment and stewardship at the Pensions and Lifetime Savings Association, noted that "schemes should not just consider the new regulations as a compliance exercise, but should instead focus on how they can meaningfully implement ESG and stewardship across their portfolio in a way which achieves the best long-term outcomes for scheme members".
She added: "Over the past few years there has been an explosion in the number of ESG products in the market, but schemes must remain vigilant.
"Trustees should work with their advisers to do the proper due diligence to differentiate between those asset managers who are walking the walk on ESG and stewardship and those who are just greenwashing.”
Romi Savova, chief executive of PensionBee - which offers the Future World Plan, a sustainable investment fund managed by Legal & General - noted there was "a current movement to divest of shares in companies that are harming the environment."
She said: "However we believe that a much better strategy is to buy as many shares as possible in the companies we want to change, and then using shareholder rights to get them to behave differently.