There are no explicit policies aiming to end fossil fuel expansion in surveyed UK pension funds, and only 40 per cent have published 2025 targets to reduce emissions.

The £3tr in UK pensions sector represents a critical frontier for climate action, but a survey from Make My Money Matter in its Climate Action Report highlights both progress made by industry leaders, but also critical gaps that schemes must address if they are to achieve real world impact.

The report is based on a questionnaire aligned with indicators to assess action that was sent to the 20 largest defined contribution (DC) workplace pension providers based on their DC assets. These providers were: Aegon, Aon, Aviva, Cushon, Fidelity, Hargreaves Lansdown, Legal and General, LifeSight, Mercer, National Pension Trust, Nest, Now: Pensions, Prudential, Royal London, Scottish Widows, SEI, Smart Pension, Standard Life, The People’s Pension and TPT Retirement Solutions.

Collectively these funds represent well over £500bn in DC assets and over 15 million active members.

The report notes that there are some emerging areas of progress from the industry; a majority of providers have begun to reduce their overall financed emissions, while a similar number have outlined plans to increase investments in climate solutions.

However, of the 20 providers: 80 per cent have not made public commitments on eliminating deforestation from their portfolios, 50 per cent do not have explicit voting policies aligned to achieving global temperature goals, none have explicit policies aiming to end fossil fuel expansion and 60 per cent have not published 2025 targets to reduce emissions.

“Twelve months on from COP26 in Glasgow, climate action from the UK pensions industry remains insufficient and fragmented. We hope this report acts as an urgent wake up call to the pensions industry – highlighting the absence of clear, co-ordinated and consistent climate action to date – while showcasing the critical steps that must be taken to get back on track,” commented Tony Burdon, CEO at Make My Money Matter.

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