Interactive Investor

Green pensions: ii calls for greater awareness

17th February 2021 12:11

Rebecca O'Connor from interactive investor

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A SIPP is the only way to manage your pension money completely in line with your own values.

In response to the PLSA’s research published today, which found that three in five workplace pension holders don’t know if their pension scheme is taking any action on climate change,

Becky O’Connor, Head of Pensions and Savings, interactive investor, said: “Awareness of the power of pensions to help prevent climate damage has exploded this year. But in the past, genuine action from pension providers in this area has been patchy, with a pioneering few leading the way and others dragging their heels. Action on climate from more pension companies should be welcomed – it’s a case of better late than never.

“Regulatory changes on things like climate-related financial disclosures have prompted more to step into line. Consumer awareness campaigns have helped this along. But providers can’t take too much credit here. They’ve known for a long time that pension investments have historically had large exposure to fossil fuels – directly and also via the banks that lend to carbon-intensive companies. They knew they were part of the climate change problem for years before stepping up.

“The lack of awareness of this issue among pension holders is not their fault, if the message of how pensions work and what they are invested in isn’t being communicated. This needs to be fixed. The focus must now be on explaining how pensions work and how investments within them can be sustainable to customers in a transparent way, allowing them to have a say. It’s their money after all.

“A SIPP is the only way to manage your pension money completely in line with your own values. At interactive investor, we see a rising proportion of SIPP customers using ethical funds.”

Interactive investor, the flat-fee pension provider, offers the ACE 40 range of ethical and sustainable investments, which can be added into a Self-Invested Personal Pension.

A recent poll by interactive investor, found that almost two-fifths of investors (38%) actively invested more in ESG funds/shares over the past year, with 43% saying they take ESG into account when investing, and that this was mostly a result of the growing climate emergency focusing their minds. Over a quarter (26%) cited the strong performance of ESG related funds and shares as a factor in their decision.

Separate research from interactive investor and Boring Money Show Me My Money, found that people were generally unaware of how their pensions were invested and could not find this information easily.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Important information – SIPPs are aimed at people happy to make their own investment decisions. Investment value can go up or down and you could get back less than you invest. You can normally only access the money from age 55 (57 from 2028). We recommend seeking advice from a suitably qualified financial adviser before making any decisions. Pension and tax rules depend on your circumstances and may change in future.

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