Should you invest your pension savings in environmentally friendly investments? Everything you need to know about the DWP’s actions
Today, ahead of the UN Climate Change Conference (COP26) in November, pension investment and law were questioned. The Department for Work and Pensions (DWP) was questioned on how pension investment is/will be managed in an environmentally sustainable manner.
Many people have recognized pension savings and investments as a critical instrument for combating the effects of climate change. Guy Opperman, the DWP’s Parliamentary Under-Secretary, was grilled today about the government’s plans to use pensions to achieve a “net zero” goal.
Nigel Mills, the Conservative MP for Amber Valley, pressed Mr Opperman on how pension scheme trustees/investors should act when prioritizing responsibilities during this work and pensions committee grilling.
“Should pension trustees invest to attain the best pension [outcome]for their scheme members or should they invest to satisfy climate and other objectives?” Mr Mills wondered. “What should be their first priority?”
Mr. Opperman reacted by stating that while overall goals for pension plans should not be altered, the government should intervene where it can.
“I do not believe that fiduciary duties should be modified in this manner,” Mr. Opperman added.
“I know that was the consensus among the witnesses who came to you on the 30th of June…
“….I would certainly oppose that because it is not the position of the PSA or various trustee organizations or pensions organizations.
“I believe that what the government can do, as I’ve already stated, is to ensure that climate risk and climate change are taken into consideration in investment decisions made by a trustee, and then eventually by an asset manager.
“Rather than requiring trustees to do X, Y, or Z, we need them to evaluate these issues and then report on how they were addressed.
“And keep in mind that climate risk affects every asset on the planet.
“Because no asset is completely immune to climate change and danger, these solutions are currently being studied.
“However, I would vigorously oppose a substantial alteration to fiduciary obligation in the manner recommended by some.”
Many people who are concerned about the environment may want to make changes to their pensions themselves, as new study has shown how simple “greening” a pension may be. “Brinkwire News in Condensed Form.”