Tempting workplace pension scheme members to engage with their pension savings has always been difficult – people have enough going on in the present without having to worry about events such as retirement which may be decades ahead.
The introduction of auto-enrolment has made that task harder still. The reason is simple: when you hear you’re automatically part of your work’s pension scheme, it’s only natural to assume everything is taken care of.
However, there is another reason for employees to get acquainted with their workplace pension plan, as according to data from research by Aviva, Make My Money Matter and Route 2 the average UK pension helps finance over 19 tonnes of CO2 emissions per year, that’s equivalent to running nine family cars or burning 1,100 coal fires a year.
When compared to other sustainability options employees switching to a sustainable pension are taking the most effective action an individual can take in the fight against climate change.
According to a new report:
- it’s 20 X more effective than switching to an electric car,
- 40 X more effective than switching to a renewable energy provider,
- 57 X more effective than switching to a vegan diet.
To what extent is your pension fund destroying the planet?
Nick Robins, Professor in practice Sustainable Finance at the London School of Economics, said: “This is a very powerful piece of analysis, credibly showing how carbon emissions linked to the consumption of a financial service such as a pension can be compared with other parts of a person’s lifestyle, such as diet, housing and transport”.
“Shifting investment is an important way of sending signals to companies to accelerate action to support the net-zero transition”.
As an employer you can support employees in making the switch by promoting sustainable funds within your existing workplace pension solution or selecting a sustainable default fund option.