For the first time in 25 episodes, Darren and Nico introduced me to someone I not only didn’t know, but had never heard of! Mattea Pauc, founder of Re-educating Earthlings and author of books such as “Will Mr Sloth save the forest?”
This podcast is about what she does. Here is the gist – from Mattea’s linked in profile.
What does my work consist of? Some days I’ll be teaching in schools and others I’ll be hosting workshops for investors or giving talks about our dis-connection from nature to various business people and offering advice on how they can integrate nature-based solutions into their business decisions – it’s varied and awesome.
This may be an occasion where the podcast format was restrictive. I suspect that what Mattea has to offer is rather more than what we got (and at over 70 minutes we got quite a bit).
Famously , the VFM framework consultation does not include a metric for ESG. When asked about this, Des Healy made it clear that the ES metric is in place (TCFD). TCFD could be integrated into the VFM Framework, Government could have chosen to exclude workplace pensions that do not adopt ESG principles as workplace pensions but it chose not to.
As with the podcast from Mike Berners- Lee, we never quite understood how a focus on Mattea’s agenda would translate into better member outcomes. I think there is a strong argument to be made that the extra investment in researching and allocating to stocks and debt that focus on sustainability, will provide more pension from a bigger pot over time.
I’m sure that Mattea is right to say that we do not sufficiently account for the importance of natural capital in making investment decisions. Many of us think about this a lot, and worry what we can do about it.
One such instance – which was discussed a lot – is the impact of pollutants and especially of sewage. This has been a week when Thames Water has been fined for killing fish with effluents in the River Mole near Gatwick. It has been a week when the river Thames has stunk. Thames Water is largely owned by pension funds.
It has also been a week when BP has reported that it is planning to hand over all £30bn of the assets its pension scheme manages to the fiduciary control of an insurance company in a “buy-in” of assets and liabilities. The FT reports
A spokesperson for the BP pension trustees said they had a duty to “continually review and assess all investment options to manage the security of the fund and members’ benefits”, adding that “such options include long-term insurance policies”.
The deal is interesting from an ESG perspective as that £30bn of capital is currently managed by Trustees who, though independent of BP, are dependent on BP’s sponsorship of scheme funding and governance. BP has in its pension scheme, a means to offset much of the damage it has and is doing to the environment, through paying for its pension portfolio to do positive good to the planet.
I am not an expert in ESG, or indeed in fiduciary duty, but I see that £30 billion heading off from trustee control to an insurance company could be a missed opportunity.
But back to the podcast
Mattea is an activist, an evangelist for preserving natural capital and a natural ally to Rob Gardner and the Rebalance Earth movement. She was on the podcast because she had spoken at events that Nico and Darren had spoken at. The podcast talks to her agenda but not to those who tune in as pension professionals and this leads to a disconnect.
We get that climate change and environmental catastrophy are the consequences of us doing nothing about the investment of our money , awareness is not the problem. The problem is what we can do about improving the way we invest the money we have.
If for instance , the cost of providing a workplace pension is so low that all can be afforded by trustees is to spread money across the market, then an opportunity is lost (as it may be lost at BP), so addressing the cost metric of the VFM framework by asking what the investment strategy is buying by way of TCFD, seems sensible.
Similarly, the quality of service that members of workplace pensions receive might include detailed reporting on the efforts of the trustees and funders of the schemes to make money matter. Most of all, the returns achieved on behalf of members might be analyzed over time to assess whether an ESG conscious strategy has delivered positive or negative returns. These are the questions I would like to hear discussed as part of the debate.
So I was a little disappointed that over 70 minutes, the discussion never really got beyond awareness and that, as with the Mike Berners-Lee podcast, the polemic overcame the discursive. This was a long advert for Mattea’s way of doing things. As I said early, we had no way of knowing why her way of doing things was effective, other than through the assertions of the presenters.
When I spent three days near Cirencester with the LGPS community, I saw people who were passionate about averting climate change , preserving natural capital and ensuring that the pension money they managed played a part in doing just that. There was no hint of “green-washing” about the delegates, they carried on their discussions at coffee-breaks, breakfasts and at dinner.
There is an open door for those like Mattea, who want pensions with a purpose. She should talk to Karen Shackleton and join her movement. She should work with Rob and Rebalance Earth and she should use opportunities like this podcast to reach out to asset owners to work with us, whether we have a few thousand in our pot or a few million.
Thinking about this podcast , helped me understand how best to work with those in Extinction Rebellion and other pressure group and use their energy for good. We are all on the same planet and we do not need to be educated of the need to change. We need to be educated about how to go about it. They need help in understanding what we do- too!