
Alice Farrell
Policy Advisor
Collectively, UK pension pots are worth over £2.6 trillion. This is a huge amount of money, which, if invested in green technologies and eco-friendly businesses, could be a powerful weapon to help us reach Net Zero. But in reality, many pension funds invest in activities which are harmful to the planet, such as fossil fuel extraction, deforestation, and pollution.
In recent years, campaigns such as Make My Money Matter have worked to raise awareness of the potentially negative impacts of pension fund investments, and galvanise the pension industry to do better. But while promising changes have happened (such as 63 pension providers signing up to Make My Money Matter’s Green Pensions Charter), we are still a long way from a truly green pensions system. Although 68% of pension-holders want their savings to help fight climate change, a recent report by the investment research firm MorningStar found that just £1 in £10 is invested sustainably.
Greening our pensions requires behaviour change. But to achieve transformative change, we need to act both downstream and upstream. Downstream, at the individual level, we need individual pension-holders to switch to greener funds. But upstream, pension fund managers must develop high-quality green pension investment options, based on quality environmental disclosure from individual businesses.
In our latest report, we outline seven ideas, grounded in behavioural science, to achieve a greener pensions system and help to avert the climate crisis. Downstream, we aim to support individual pension-holders to take up greener pension options, and upstream, we address the pensions market itself to improve the availability and integrity of green pensions.
BIT’s seven behaviourally-informed ideas to green pensions
If you are a business which provides a workplace pension, pension provider or a policy-maker and would be interested in helping us to develop and test these ideas, please do get in touch at [email protected].
Policy Advisor
Principal Advisor
The Behavioural Insights Team
The Behavioural Insights Team
Director, Head of Climate, Energy & Sustainability