July 3, 2019 / News

Senior pension figures pledge to reduce climate impact

By Joe McGrath, ESG Clarity

Mallowstreet becomes the latest company pledging to analyse the impact that investments have on the environment

Senior pension figures pledge to reduce climate impact

Several senior figures at some of the UK’s largest pension funds have signed a Climate Charter, pledging to analyse the impact investments have on the environment.

The Charter, launched by mallowstreet at its Winchester Summit at the end of June, asks pension scheme CIOs, trustees and managers to recommend to their boards that investments be scrutinised about their climate impact.

Managers are also asked to engage with companies on reducing carbon emissions.

At the mallowstreet event, trustees agreed that not enough is being done to combat global warming. Delegates were asked whether they thought time was running out to address and tackle climate change and 89% of the audience said yes.

The Climate Charter commits individuals rather than pension funds or trustee boards.

Dawid Konotey-Ahulu, co-founder of mallowstreet, the online community for pension trustees, said: “We had a chance to halt climate change 30 years ago, but we missed the opportunity, and now we are out of time.

“But to see the roomful of pension scheme CIOs, trustees and managers spontaneously agreeing to take radical, decisive action now was incredible. I cannot remember being a part of a discussion like it.”

Mallowstreet co-founder Rob Gardner added: “The Climate Charter recognises that we have 11,143 days to alter the greatest risk facing our planet and that asset owners working together can be a force for good along the investment value chain, from consultants to asset managers, to the end investments – be they companies, property, infrastructure etc.”

As part of the Charter’s aims, it also asks that signatories agree to “review, and ultimately recommend the termination of” investment managers that don’t support and actively engage in the transition to a low carbon future.

Paul Trickett, chair at Santander UK Pension Scheme Trustees, chair at Railpen Investment and a trustee at the Mineworkers’ Pension Scheme, said: “I think the time has come for asset owners to focus on this as a core part of their investment decision making. I don’t know exactly how urgent it is, but I would prefer not to wait any longer.

“The industry is focused on achieving its obligations to members. Establishing climate change as an issue to be considered as part of that is going to take time but if asset owners press for this it will happen more quickly.”

Mark Tennant, chairman of the £8bn Centrica Common Investment Fund, added: “The problem we have with climate change is that everyone talks about it and everyone is deeply concerned, but very little is being done.

“We hold assets for future generations. For them, climate change matters. The younger generation will require us to look at the carbon footprint and the social impact of the investments we make on their behalf.”