Make My Money Matter urges UK's 81 largest occupational pension schemes to target net zero

The campaign initiative, which was set up by screenwriter and director Richard Curtis, said a large number of UK pension funds had yet to make dedicated commitments to aligning their investment portfolios with the Paris Agreement's climate goals, despite growing momentum in the sector towards setting net zero portfolio targets.

Make My Money Matter (MMMM) said in the letter yesterday that funds should seek to halve emissions in their investment portfolios by 2030 before reaching a net zero position by 2050. The letter also calls on the funds to fully divest from coal investments, engage with their investee companies and divest where engagement does not work, fund climate transition solutions, match best practice frameworks, and to set "challenging" five-year benchmarks for their climate efforts.

The letter has been sent to the pension schemes of a number of fossil fuel giants including BP, ExxonMobil, and Shell, as well as to the schemes offered by firms across a wider array of sectors such as British Airways, ITV, and Imperial Tobacco.

Other recipients include financial services organisations such as the Financial Conduct Authority's Pension Plan, the Bank of England's Pension Fund, and the HSBC Bank Pension Scheme.

The Local Government Pension Scheme (LGPS) funds of Strathclyde and West Midlands - both criticised earlier this year for high fossil fuel holdings - were also sent the letter, alongside those of Tyne & Wear, Lancashire, Hampshire, Essex, Kent, Staffordshire, Cheshire, East Riding, Hertfordshire and West Sussex, and London and Northern Irish schemes.

"These schemes have extraordinary power to help tackle the climate crisis and protect savers' investments, but many have yet to respond to growing demand for cleaner, greener pensions," said MMMM chief executive Tony Burdon said "To meet the 1.5-degree ambition of the Paris Agreement and tackle the climate emergency, we need our finance industry to move fast. Pensions are a crucial part of this and, with £2.6tr circulating in the UK sector alone, it is vital that no stone is left unturned."

It follows the launch of MMMM's Green Pensions Charter, which calls on pension funds to invest more sustainably and has so far secured a total of 63 signatories, as well as a similar written campaign targeted at defined contribution (DC) master trusts.

"This is why we need all DB schemes to use their enormous pension power to tackle the climate crisis, and urgently reduce emissions," added Burdon. "We know that this approach is good for the planet, protects investments from climate risks and is in line with public demand. That's why now is the moment for all pension schemes to commit to robust net zero targets, and ensure our pensions are building a world worth retiring into."

A version of this article originally appeared at Professional Pensions.