Pension Fund Investments: Climate Change
(Broadland) (Con)
1. What steps she is taking to work with pension funds to
encourage them to make investment decisions that help tackle
climate change. [900392]
(Rushcliffe) (Con)
3. What steps she is taking to work with pension funds to
encourage them to make investment decisions that help tackle
climate change. [900394]
The Parliamentary Under-Secretary of State for Work and Pensions
()
With over £1.6 trillion in assets, UK occupational
pension schemes have a significant role to play in
supporting the Government’s commitment to net zero by 2050. Our
environmental, social and governance regulations, introduced by
this Conservative Government in October 2019, mean that schemes
are now required to disclose their policy on climate change. In
March, we intend to publish game-changing guidance on
climate-related financial disclosure. I have written to the 50
largest schemes in the country to urge them to act on their
investment duties and to tackle climate risk.
I welcome the progress that has been made on pension funds
addressing climate change and ask the Minister to meet me
concerning a constituent who is unable to access her pension fund
without paying in excess of £2,000 in fees for independent
financial advice —money she does not have until she accesses her
fund.
I welcome my hon. Friend to the House, and I am happy to meet
him—that will happen very soon. His constituent should understand
that Parliament collectively required a £30,000 threshold whereby
no individual can withdraw their defined benefit pension without
first receiving advice from an independent financial adviser. As
a Conservative, I am of course very keen for individuals to make
their own decisions about their own money, but this decision was
made and it ensured that an individual is protected from a
decision without advice.
As my constituents in Rushcliffe save for their retirement, they
want to know about the potential financial risk to their pension
pots from climate change and that their savings are helping to
tackle, rather than embed, the climate crisis. My hon. Friend has
done a lot to ensure that ESG plays a key part in pension
providers’ decision making. Will he consider requiring them to
disclose their exposure to climate-related risk to their members?
It is a pleasure to welcome my hon. Friend to the House. She
obviously knows that Ken Clarke was a legend to us all, and I am
sure that she will be a great champion on behalf of the citizens
of Rushcliffe.
Sadly, too few schemes are making any form of disclosure about
their environmental investments and their climate risk, and I am
determined to change that. Every private occupational
pension holder should be able to know, individually, how
their fund is invested and be able to hold the trustees and asset
managers to account.
(Birmingham, Erdington)
(Lab)
With Australia burning, South sea islands drowning, millions
suffering from pollution and many dying, the world faces an
unprecedented climate crisis. The power of pension funds is
immense and, while I welcome the funds that have demanded that
investment managers must, in the words of the Minister, “do the
right thing”, so much more can, and should, be done. Will he
therefore agree to cross-party, Front-Bench discussions,
including on convening a pensions summit of all those with power,
urging them to discharge their responsibilities to clean up our
world?
I have been fortunate to work with the hon. Gentleman on a number
of policies over the two and a half years that we have both held
this portfolio. Clearly, I will wait to see the details of his
proposals, but I would be delighted, subject to having read and
considered them properly, to meet him and, at the very least,
discuss how we take these matters forward.
(Wallasey) (Lab)
It is important that there is cross-party working on things that
are as long term as pensions, but will the Minister assure the
House that this transparency, which we all welcome, will not be
paid for by massively increased fees charged to savers?
The hon. Lady will understand that there are two points to her
question: the Task Force on Climate-Related Financial Disclosures
is a voluntary arrangement that organisations have already
entered into, and ongoing disclosure takes place; and in respect
of the fees, the Government have agreed to review the matter in
2020, and we will look at that.
