Competition between workplace pension providers has been a great boon to the 11 million new savers who have payroll contributions being made towards a retirement pot.
The vast majority of the retirement pots being built up are likely to see investments lasting over ten years and funding the activities of public companies, Governments and an increasing number of private enterprises. This money is influential , it can flow to organisations who are enthusiastically embracing the challenge of climate change and it can change the behavior of those that are not.
The extent to which the funders, trustees, boards and IGCs of workplace pensions are serious about reducing the carbon emissions of organisations they invest in, starts with their pledges to make their organisations and their investments “net zero”. That is to say that they are not contributing to an increase in noxious emissions, but ensuring that the amount of carbon they are putting into the atmosphere is cancelled by the amount of carbon they are taking out.
I hope I have this right! I chaired a session at a conference last week which was supposed to be looking at the corporate culture and the behavior of corporate leaders in making this happen. For a number of reasons my session was a little chaotic and I continue to struggle about how to tell sheep from goats. Who is serious and has a plan which is likely to work, who is green washing?
Despite these net-zero pledges coming in from master trusts and the providers of workplace GPPs, I don’t see a reliable study of what is happening. I am now looking at the TCFD statements of some of the providers (Scottish Widows and Legal & General have sent me their master trust TCFD statements). I have been looking at them for some time but find myself without the analytical skills to determine what makes sense and what doesn’t. In short I am looking for help as I suspect are more august people than me (like the regulators). It is one thing to make a promise and report on progress but it is another thing to make purchasing decisions based on what is currently in the public domain.
I do not expect to become an expert in this area but there are people and organisations that I am contacting to get help. I’m interested in the work of Minerva and Share Action and keen to follow what Rob Gardner does with the pilot launch of the Rebalance Earth platform.
If you happen not to work for one of these organisations but are doing work in this sphere, I’d be grateful if you could be in touch. ( firstname.lastname@example.org )
It’s a truism that if it doesn’t get measured it doesn’t matter and the employers who choose workplace pensions need a more reliable measure of whether their money will matter than I can find today. I also think it is important for the competition between workplace pension providers that there are no short-cuts and no cheating, it is too easy for “net zero” to become as spurious as some with profits bonus declarations.
In the meantime, I have found some helpful sources that I’m using in trying to make head or tail of these TCFD statements
- Standardising net zero – a guide for employers from the Carbon Trust
- Measuring biodiversity as a store of value for the future (rebalance.earth)
- Science based targets for a net-zero standard
- Bloomberg help you chart your companies future towards net zero
- Zurich – measuring progress on biodiversity
I am sure I am scratching at the surface, for the more I read, the more I am concerned that Britain’s 1m + employers and 21m workplace savers have no reliable metric to work out if what they are investing in is really making their money work harder towards net zero or relying on unsustainable or even fraudulent strategies.