Pensions with intention
The UK has a collective pension pot worth over £3 trillion – and yet the vast majority of us have no idea how this money is invested on our behalf. The Good Economy invited Tony Burdon, CEO of the just launched campaign Make My Money Matter, to share why he thinks Covid-19 will invigorate us to insist our pensions share our intentions
Survey after survey shows that people want something better after Covid-19, both in the UK and globally. Here at home, the trauma of ill health, death, and loss of livelihoods has been set against the hard work of front-line workers and by a powerful community response.
A BritainThinks survey showed only 12% of people want things to go back to normal, with the majority wanting more investment in health, a more equitable economic recovery and a kinder society.
So it’s clear the majority of people want to build back better, creating a society more in line with their values. But how is this going to happen? Government direction and spending will play an important part, but it’s through private sector activity and investment that we will be able to drive transformative, long-term change.
That’s where our pensions come in. Right now, there is over £3
trillion invested through UK pensions alone – nearly £40 trillion
globally. But a recent Make My Money Matter survey found that nearly
three-quarters of British people either don’t know or don’t believe
their pensions are invested in line with their values.
This isn’t for a lack of appetite – despite everything, we know from research undertaken for DfiD by The Good Economy that 70% of the British public would like to see their money have a positive impact in the world.
That’s why we launched Make My Money Matter, a brand new campaign calling for the trillions invested through our pensions to help build a better world. The campaign was co-founded by film director Richard Curtis and former Number 10 special adviser Jo Corlett, as a people powered campaign fighting for a world where we all know where our pension money goes. Partners at the time of launch earlier this month included PNB Paribas, Oxfam, Triodos Bank and WWF.
Through the campaign, we aim to empower each and every one of us to know where our money is invested, to understand the impact that it is having, and to ensure it aligns with our values while still getting a good return.
In doing this, we believe we can help spark a movement that moves billions of pounds into investments which create a more just, equitable and sustainable world. This is essential if we are to deliver on the UN’s Sustainable Development Goals, meet the targets of the Paris Climate Agreement and build back better from the coronavirus pandemic.
So, why pensions? This is our money, but very few of us would be able to say how it is invested, and what impact it is having on the world. Most of the time, our money is invested on our behalf without anyone ever checking where it is going.
This contradiction means that ethical consumers may well have a pension that invests in fast fashion; vegans may have pensions that invest in meat production; climate activists may have pensions that invest in fossil fuels; and doctors could have pensions that invest in tobacco.
This has to change. It’s time that all savers have voice and choice in where their pension goes – by doing so we can all make our money matter.
Knowing there no longer has to be a trade-off between values or value, our campaign will work with government, industry and business to change our pensions system and ensure our money helps build a world we want while it grows.
There is over £3 trillion invested through UK pensions alone. But a recent survey found that nearly three-quarters of British people either don’t know or don’t believe their pensions are invested in line with their values.
To achieve this, we’re calling on the pensions industry to do three things. First, to listen to savers, and explain how their customers’ views and values have influenced investment decisions. Second, to play their part in tackling the climate emergency by making all pension funds at least halve their carbon emissions by 2030, and achieve net zero emissions by 2050 or earlier. And, finally, to grow the amount of investment that is focused on having a positive impact on people and planet.
As a first step, we’re calling for the upcoming Pensions Bill to require pension funds to report their projected emissions to 2050, and consistency with the Paris Climate Agreement. This kind of information will help inform the choices pension savers and employers make, such as whether their pension scheme is tackling or worsening the climate emergency.
Our pensions can play an important part in building back better. They can be used to invest in businesses that treat their workers well, invest in local communities and avoid excessive CEO pay. Supporting businesses that address real challenges in our lives – from social care to affordable housing. And by investing in a green and resilient recovery – from clean energy, to nature-based solutions that protect biodiversity and businesses committed to Net Zero.
But it’s not just up to the government or the pensions industry to fix this. We all have a part to play.
If you have a pension, you can sign up to our manifesto calling for change. You can write to your employer or to your pension fund, and ask how your money is being invested, and what impact it has on people and planet. If you’re not happy with the answer, you can ask how it can do better.
If you are a business, an NGO, local authority, university or any other employer, have a look at your staff pension scheme. Does it build a world that you want your employees to retire into? Is it aligned with your mission or your values? Will it play its part in building back better? If not, work with the Trustees or pension provider to seek change.
It’s time to make our money matter, and for pensions to play their part in a financial system that helps build back better. Because what’s the point of saving for retirement if we don’t have a world we want to retire in to?
Tony Burdon is CEO of Make My Money Matter, a people-powered campaign fighting for a world where we all know where our pension money goes. www.makemymoneymatter.co.uk