ZeroBees, a leading sustainability consultancy, has launched a Pensions League Table & Calculator to help organizations assess the emissions impact of pension investments. The league table ranks commonly held pension funds based on their carbon emissions per pound invested, and the calculator provides an overview of the potential emissions impact of different pension pots.
The Pensions League Table, based on publicly available data, revealed significant differences in emissions performance among the assessed pension funds. Scottish Widow’s Pensions Portfolio Four (Series 2) emerged as the best-performing fund in terms of scope 1, and 3 emissions, while the People’s Pension Global Investments Funds performed worst, with 66% more emissions per pound invested. The league table provides a valuable tool for organisations to make informed decisions about their pension investments and consider the emissions impact as part of their overall sustainability strategy. The league table also includes pensions from Nest, Aegon and Smart Pensions.
Let’s take a small to medium sized business, with an overall pension fund pot for its employees (assuming no one has moved out of the fund or retired) might be £300,000 in total. Depending on where they choose to hold their default pension, their annual pension related emissions could be 225tCO2e or 135tCO2e. The choice of default pension can drive 90tCO2e per year more or less depending on that fundamental choice.
With the rise of direct contribution pensions in the UK, where employees build their own pension pots, rather than direct benefit pensions that provide a set income, pension investments have a substantial impact on carbon emissions. The UK pension market is worth over $3 trillion and is the third largest in the world. Considering the emissions impact of pensions is critical for organizations aiming to reduce their carbon footprint and achieve their Net Zero goals.
Furthermore, there is a growing demand from employees for responsible pension investments. Two-thirds of employees believe it is important for their workplace pension fund to be invested responsibly, according to a survey by Aviva in 2022. ZeroBees’ experience with small and medium-sized enterprises (SMEs) suggests that this number is even higher, with many employees unaware of the climate impact of their workplace pensions.
Addressing the climate impacts of default workplace pensions can have a positive impact on staff retention and employer branding, while supporting organizations’ Net Zero goals and claims. By using ZeroBees’ Pensions League Table & Calculator, organisations can make informed decisions about their pension investments and take meaningful steps towards reducing their emissions.
Toby Radcliffe, CEO of ZeroBees, said, “Pensions are one of our most impactful activities as individuals and as businesses. By providing organisations with a comprehensive overview of pension fund emissions performance, we aim to empower them to make more sustainable investment decisions and contribute to the fight against climate change.”
Organisations interested in learning more about comprehensive organisational carbon footprinting and the impacts of their default pension schemes should contact ZeroBees. The full calculator is available on the ZeroBees website.
