Climate campaign to target pension funds

ShareAction will provide practical advice to help investors manage their carbon risks

Responsible investment group ShareAction is to launch a campaign aimed at convincing pension funds to act on the threat of climate change.

 The campaign, called Green Light, will be launched on 29 October at an event with the Minister of State for Pensions, Steve Webb MP. It will be supported by several civil society groups including environmental campaigners, trade unions and faith organisations.

 The event will see the publication of new research exploring how pension fund managers can measure and report their carbon risk exposure, how they could manage their carbon-intensive investments, what their role is in developing a lower-carbon economy and how to create the necessary policy frameworks. The proposals were developed through a series of workshops held over the summer with pensions and responsible investment experts.

The campaign, which will run for three years, will provide pension fund owners and managers with the practical tools to help them manage carbon risks. ShareAction hopes this will move the debate beyond the current stalemate between activists calling on institutional investors to divest from fossil fuel energy companies and their response that it is not possible if financial performance is to be ensured.

“The vast majority of pension funds in the UK don’t have climate change policies, they haven’t measured the carbon intensity of their portfolio and they have no target on allocating towards low-carbon options,” said Louise Rouse, engagement director at ShareAction. “We believe pension fund members actively asking their pension funds what they are doing to manage climate change risk can help drive change.”

One recommendation is likely to be that pension funds should better support the Institutional Investors Group on Climate Change, the main group lobbying government for effective legislation on carbon. “We need to see investors regard the policy situation on climate as being fundamental,” said Rouse.