New report finds greening pensions reduces carbon footprint more than stopping flying

Scottish Widows’ latest Green Pensions Report has found that while most Brits are well aware of how to reduce their carbon footprint through changing their behaviours, two thirds (67%) don’t know how to switch to a ‘green pension’.

If this information gap were to be addressed by the government, industry and employers, UK consumers could collectively save up to 386 million tonnes of carbon emissions annually through their pensions[1] – the equivalent of 11 return flights from London to New York per person.[2] Despite this, savings and pensions ranked last in terms of perceived impact on climate change amongst a range of factors in an individual’s lifestyle.

A green pension is a fund that aims to generate returns for savers via environmentally positive investments. These funds normally have a stated objective of environmental considerations e.g., avoiding or reducing investments in or helping transition industries such as fossil fuels, which generate large amounts of carbon emissions; and/or focusing on investments that will support reductions in carbon emissions.

With support from influential environmental advocate Jarvis Smith, Scottish Widows’ second annual Green Pensions Report explores the growing appetite for responsible retirement savings propositions among employers and employees. Key findings include:

• Three quarters of UK consumers (74%) express a keen interest in obtaining more information about sustainable options for retirement savings
• Yet only 10% of the UK population have fully switched to green pensions – due to a lack of information and access to green pensions
• Just under a quarter (23%) of companies in the UK do not offer green or ethical pensions to their employees

Shipra Gupta, Responsible Investment Lead at Scottish Widows, said: “Our latest Green Pensions Report demonstrates a critical need for heightened awareness and action regarding the role of green pensions in mitigating carbon emissions."

"Understanding of the climate crisis has changed dramatically over the last few years, with countries and organisations being bolder in their net zero targets and individuals making changes in their lifestyles to cut their household carbon emissions. Yet most people are still unaware that pensions are one of the most powerful tools at our disposal to make real progress towards net zero."

Scottish Widows urged employers who are concerned about the environmental impact of their workplace pension schemes to speak with their providers, who can offer tailored financial information for employees to invest sustainably. Employees who have a workplace pension provided by Scottish Widows can now use a feature called ‘Find Your Impact’ in the app to determine the ESG profile of their own pension, helping inform more sustainable choices.

Find out more here.