The people in my life know me as the “sustainable” one. I’m the person who makes every decision guided by my ethics and concern for the environment. I quit fast fashion years ago, I eat a vegan diet, am strict about only buying from companies that pay their workers fairly, and grow most of my fruit and veg on my allotment. I’m not perfect by any measure, but I do try my best to make sure my actions align with my values. So, imagine my panic when I found out my pension could be funding fossil fuels, deforestation, arms and tobacco.
There’s an estimated £2.6tn in UK pensions, and much of that is funding actions and industries that I, and many others, strongly oppose. Most people don’t realise their pension money is even being invested, let alone that it’s being invested in industries that run against our values, threaten our health and jeopardise the very future of our planet. It’s likely there are pacificists out there unknowingly funding weapons and climate activists unwittingly handing money over to the fossil fuels industry.
When I realised where my money might be invested – and the potential impact of the trillions invested through our pension schemes – I was confident that making sure that my money was invested more sustainably would outstrip all the other actions I was taking. It turns out my inkling was right – but the impact was beyond what I had imagined.
The simple act of greening your pension can have 21 times more impact in reducing your carbon footprint than giving up flying, going vegetarian, and switching to a renewable energy provider combined, according to research from Make My Money Matter, Aviva and Route2.
My vegan diet? Great. But getting a green pension is 57 times more effective. My reduced shower time? Not bad. But getting a green pension outstrips that impact 330 times over. The figures are staggering, and I was determined to take advantage of this enormous opportunity to make a difference.
In spite of my uncertainty entering into the murky world of finance, I saw just how powerful my pension could be, and I was determined to take control of my money.
In October 2012, it became mandatory for employers to auto-enrol staff (earning more than £10,000 or over the age of 22) into a workplace pension scheme. So for many people, taking action to green their pension will involve talking to their employer to find out more about their company’s scheme – and putting pressure on them to change it, if they discover it isn’t sustainable. (If that sounds like something that’s never going to make it to the top of your to-do list, fear not, as Make My Money Matter have a handy email template that does all the hard work for you).
However, as a freelance journalist and part-time fashion lecturer, my pension situation is slightly more complicated. My lecturing income feeds into a teacher’s pension, and my freelance work funds a personal pension – which was in limbo until last week as I umm-ed and ahh-ed over what seemed like a dauntingly complicated process.
My first step in checking I wasn’t unwittingly funding climate breakdown was to get in touch with the Teachers’ Pensions Scheme. Fired up and prepared to campaign the entire organisation to change their ways, I was informed that as the monetary fund is held by HM Treasury, no investment is undertaken in stocks or shares. So far, so good.
Next, it was time to forge ahead with my personal pension. I had been planning to just hand everything over to the financial adviser who helped me get my mortgage and leave him to it – I just wanted to set myself up for the future with as little input as possible. But now that I knew that my pension could well be compromising the very future I was planning for, I wanted some control.
I set up a meeting. I noted pension providers that had responded to Make My Money Matter’s Net Zero Hero campaign, pledging to commit to meaningful net zero emissions, and researched those taking other steps to make an impact, such as investing in climate solutions such as renewable energy and green infrastructure.
After a mind-bending 45 minutes trying to learn about the world of finance, I broached the subject of wanting an ethical pension, stressing that I didn’t want to invest my money in fossil fuels or deforestation. I was slightly worried that this professional would just think I’m a novice asking for something I couldn’t possibly understand but, instead, he assured me that everything would be screened accordingly and reported back to me. It was that simple. A two-minute chat.
Previously, I had thought of my pension as just a small pot that will see me through retirement. Instead, I should have been thinking of pensions collectively. Each year, £20bn is invested through company pensions schemes – just imagine what kind of world that money could be building if we put it to good use.
Once we understand the impact of our pensions, we can unlock their power for good. As more people sign up to Make My Money Matter, talk to their bosses, ask questions, and set boundaries for their money, businesses and providers are responding in turn, committing to net zero and making ever greener investments. It makes sense – after all, what’s the point of saving for retirement in a world on fire?
Having done the research on my teacher’s pension and taken control of my personal pension, I’m much happier knowing that my future is now looking more secure – both financially and environmentally.
Your pension is powerful, and so are you. Tell your provider you want them to invest more sustainably here, and make sure your money is building a better world.