Rosie Venner, our Director of Movement Building, gives a quick overview of the Pension Schemes Bill, and why it matters for all of us.
The UK’s pension system is the largest in Europe. Our pension funds hold a lot of power in the economy, with around £3 trillion in assets.
If the money in our pensions continues to flow into sectors and companies that are driving the climate crisis and harming nature, we all face a very insecure future.
That’s why JustMoney Movement has been campaigning, as part of the Better Pensions Coalition, for climate risks to be considered in the government’s planned reforms to the pensions system.
A key part of this is the Pensions Schemes Bill which was announced back in September and is now making its way through Parliament.
What is the Pension Schemes Bill?
The Pension Schemes Bill aims to boost investment in the UK. But it overlooks the biggest risks to pension savers and the UK economy: climate change and nature destruction.
UK pension schemes continue to hold billions in fossil fuel companies, including those involved in new coal, oil and gas exploration, and in companies linked to deforestation. These investments not only undermine global climate goals, they also expose savers to financial risk.
The Pension Schemes Bill is a rare chance to change that, and to make pensions work for people and planet.
MPs debated the Bill on Wednesday 3 December and it will then go to the Lords.
What needs to change?
Alongside partners across civil society, we have been calling for an amendment to the Bill that would require pension providers to stop investing in thermal coal, the most polluting form of fossil fuel.
We’d also like to see this extend to other areas of fossil fuel finance in time, such as phasing out investment in all companies involved in new fossil fuel exploration or expansion.
This makes financial sense as well as climate sense. The International Energy Agency has warned that there is no scope for fossil fuel expansion if the world is to stay within safe climate limits. Fossil fuel investments are therefore vulnerable to becoming “stranded assets” when climate policies and practices make oil and gas uneconomical to extract.
The money in our pensions needs to be aligned with global climate action. This would be good news for everyone. Our pensions could be speeding up the transition to clean energy, investing in sustainable and affordable housing and creating new green jobs.
What gives us hope?
You do! Hundreds of JustMoney Movement supporters have already taken action by signing the Better Pensions petition and contacting MPs to support the amendment.
MPs are listening. Despite the specific amendment not passing at the report stage, many MPs from across the Liberal Democrats, Labour, the Green Party and Plaid Cymru supported it – a sign that politicians understand that pension reform must address climate risk.
Manuela Perteghella, MP for Stratford-on-Avon, called for action that would ‘make our pension system more responsible, more resilient and more compassionate’.
The Bill will move to the Lords next, where there will be another opportunity to make sure that climate and nature are part of the debate.
What can you do?
- Sign and share the petition
- Explore where your own pension is invested using the resources on the Money Makes Change hub.
- Sign up to our newsletter to get updates on the campaign and take part in future action.
Together, we can help ensure that the money in our pensions builds a greener, fairer future for all.