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  • Report
  • 29th Jul 2021

Greening Pensions: A Behavioural Perspective

Key findings

  • Did you know that, when asked, 7 in 10 pension-holders want their savings to help fight climate change 💰🍃? Read our new report to find out how we can tweak the choice architecture of the pensions system to make it easier for people to green their pensions. 💡
  • Could your pension be contributing to climate change 💰🌍? UK pension pots are worth over £2.6 trillion, but only £1 in £10 is invested sustainably. Our new report sets out 7 behavioural ideas to green our pensions

In this report, we contribute to the emerging conversation on green pensions by highlighting the benefits of using a behavioural perspective. We outline seven ideas, grounded in behavioural science, to achieve a greener pensions system and help to avert the climate crisis.

We start upstream to consider the pensions market itself, examining how we might apply behavioural science to ensure pension-holders have a wide range of truly green pensions to choose between. We then move downstream to the individual level: how can we encourage individual pension-holders to switch to greener options? 

The ideas are:

  1. Provide pension-holders with regular feedback on the environmental performance of their pension pots 
  2. Label pension funds to communicate environmental performance
  3. Make green pensions the default
  4. Force a periodic active choice between potential pension funds
  5. Make it easy for pension-holders to switch old pension pots to a greener fund
  6. Provide clear and timely information on businesses’ environmental impacts for pension fund managers
  7. Reward high-quality disclosure by businesses, and highlight the short-term commercial benefits