Is your pension destroying the planet and risking your long term savings?
Investing in fossil fuels was considered a safe choice with minimal risk. But is this still the case?
Climate change will affect the value of your pension. More floods, more severe weather, a warming world, and pressure on our food supply will affect our economy in profound ways. Not taking climate change into consideration is becoming a financial risk. Our money is invested in real companies, embedded in the real economy, and bound by the realities set by science including the mounting evidence of global warming. In fact, scientists are surprised by how quickly some of the effects of climate change are being seen and felt, relative to earlier predictions.
This week ShareAction (a UK based NGO) published The Green Light Report which provides an blueprint for pension funds to get a handle on their climate risk – providing ideas they can use to manage and reduce it.
Their campaign is supported by a variety of diverse groups, including UNISON, Oxfam, Christian Aid, and us. There are a few options outlined for pension funds – including engagement with target companies, stress testing investments and selecting different stocks.
This report is important because the way your pension is invested affects the quality of your retirement as well as the health of the planet.
Young savers – with decades until retirement – will find it especially important that the health of the planet and the health of their investments are linked. If we continue to pour money into practices that destroy our environment we will be susceptible to financial risk as well as the risks caused by a deteriorating planet. Sometimes we need to change direction to avoid catastrophe.
So in the case of our pension, we need to ask whether the person managing it is thinking about how to protect our money and our planet from the risks of climate change. Are your investments helping to mitigate climate change or actually accelerating it?
This research also comes at a pivotal moment since 350.org (a very successful campaigning organization started by Bill McKibben) are embarking on their European ‘Do the Math’ tour. This follows on from the successful launch of the Oxford Programme on Stranded Assets Divestment report, which looks at how the fossil fuel divestment movement compares with other divestment movements in history. Finally, our own Seize Your Power campaign – running now – aims to divert capital toward investments that sustain a green economy.
As I hold my one month old son in my arms I begin to think about what I can do to make his world a better place. The future is uncertain – and perhaps scary – but we can take steps now which will increase the likelihood that many of the things we take for granted today will still be around in the future. He has a 50/50 chance that he will live until he is 100 years old. That is profound. There is no doubt that climate change will affect his life. Our investments today will help shape his future and the future of every child on the planet. We can no longer pass the task to subsequent generations.
Now is the time for us all to ask the important questions of our pension fund and its manager. Email your pension fund and ask what it is doing to protect you and your savings from climate change risks.
If we don’t act we are part of the problem. It is our money, our future, and our planet which we can and need to secure. Take action.
See the action tool from ShareAction – email your pension fund to demand a safer, greener future for your savings: http://greenlightcampaign.org.uk/