Pension funds should be required by law to align their investments with the goal of net zero greenhouse gas emissions, says filmmaker Richard Curtis.
Curtis, co-founder of campaign group Make My Money Matter, urged ministers to follow the UK’s legal commitment to achieve net zero emissions by 2050 by requiring pension schemes to align their portfolios with the ‘objective.
He told the Guardian: “The time has come. Why not invest in sustainable investments? We see the risks of the climate crisis. This is one of the most practical changes possible.
He added that everyone must take responsibility for their impact on the climate crisis. “People can’t say, I’m going to sit on this one. It’s not going to go away. And [making net zero mandatory on pension schemes] is one of the levers of change.
Ministers have been reluctant to make mandatory changes that would affect the way companies invest, although at last year’s Cop26 climate summit Chancellor Rishi Sunak said big companies should disclose their exposure to the risks of the climate crisis by 2025.
But many campaigners believe mandatory climate risk disclosure alone doesn’t go far enough, because it doesn’t penalize companies that invest in carbon-intensive activities.
Tony Burdon, chief executive of Make My Money Matter, said: “The government must ensure net zero is mandatory [on pension schemes] to help trustees. Right now, some trustees are scared. They think they might see a legal challenge [if they moved to net zero]. We believe the exact opposite – that if they don’t go net zero, they could see legal challenges.
If the government were to make net zero targets mandatory for the pensions industry, the default position of advisers would shift to promoting low-carbon investing, which would have a transformative effect on the UK investment landscape, Burdon said.
While the UK has set a legally binding target since 2019 of reaching net zero by 2050, most pension funds have not changed their portfolios to reflect this, although many people who invest in pensions today will take them out by 2050. Make My Money Matter estimates that £1.7bn of investment in UK pension funds is still not in line with the goal of keeping the rise in the global temperature at 1.5°C, the limit the government aimed for at COP26, and which the net zero objective must reach.
This includes around 70% of the UK’s largest pension schemes, many of which are old-style end-of-career salary schemes. Aligning investments to net zero would be possible for such schemes, Curtis said, pointing to the £1 billion of investments in UK pension funds that have already shifted to portfolios compatible with a net zero target.
“There is a very positive range of options for investors. There are some very interesting companies to invest in,” said Curtis, whose films include Love Actually and Four Weddings and a Funeral. “Change my pension [to ensure it is invested in line with 1.5C] is the biggest climate change I’ve made. It’s 21 times more efficient than switching energy suppliers.
He said his son marched with Fridays for Future, the global youth movement inspired by Greta Thunberg’s school climate strikes. “I have been very inspired by the attention the younger generation is giving to the climate,” he said. “Weather was the last thing on the news – now it’s the first thing on the news.”
Curtis said it was vital to talk to young people now about pensions and the impacts they could have on the future of the planet, rather than focusing on people closer to retirement age. “It took a long time for my father to convince me that I should get a pension,” he said, but added that young people were more aware of their future because the obvious dangers of climate breakdown were become more evident and pensions should be part of that. “The youngest think about their purchases, the impact of what they do and what they buy, their clothes and their food. Pensions are one of the most effective means of bringing about change.