PensionsOct 6 2020

Opperman tells savers to engage with pensions to fix climate

Search supported by
Opperman tells savers to engage with pensions to fix climate
Guy Opperman, pensions minister

Savers can play an important role to address climate change by paying more attention to their pensions and where they are invested, pensions minister Guy Opperman has said.

Mr Opperman said if people wanted to contribute to the net zero effort then they had to “engage with their pensions and encourage sustainable investments”.

His comments formed part of a collection of essays, published by the cross-party think tank Social Market Foundation and the Chartered Banker Institute, about green finance and the role that financial services can play in delivering environmental goals.

Opperman claimed the fact that more than 10m people were now auto-enrolled, along with trillions in assets under management, pensions could do a lot to tackle the climate crisis.

He said: “If we can unleash the productive power of our pension funds, they can be at the forefront of seizing sustainable opportunities by financing the green-tech and green energy revolution we need."

He added: “I want to see our British pension funds investing in new technologies such as wind, solar, and hydrogen. These innovative technologies can turbo charge the way we travel, help us achieve net zero, and provide the long-term return that savers need.”

In 2015, the task force on Climate-related Financial Disclosures was set up to encourage the financial world to hit net zero targets.

The Pensions Schemes Bill, which is due to be debated later today (October 6), includes provisions that will allow the government to mandate pensions schemes to adopt the recommendations of the task force. 

The bill will also give the government the power to require schemes to take account of the government’s net zero targets, as well as the Paris Agreement goals of limiting the rise of average global temperatures.

Mr Opperman said more people than ever were thinking about how their pensions are invested. 

He said: “Many people are now taking a personal interest in how their own savings can play their part in getting Britain to net zero.

“Some people believe that government should simply force pension trustees to divest from high-carbon stocks. I fundamentally disagree. 

“Simply selling these assets to others without the same environmental concerns is counterproductive and will do nothing to get Britain to net zero.”

He added: “Net-zero is a long-term challenge facing our country. By unleashing the productive power of our pensions and engaging with savers, we can get there.”

Industry commitments

Last week (October 2), Mr Opperman showed his support for the City watchdog’s plans to align its climate risk reporting requirements with those proposed in the Pension Schemes Bill.

In a letter to Mr Opperman, the Financial Conduct Authority (FCA) outlined plans to usher in “landmark” climate change measures in 2022.