The changing climate of members – is your fund ready?
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Climate change is a long-term issue and more important than Brexit according to 71% of Britons in a Christian Aid study. The poll released shortly after Boris Johnson came to power urged the incumbent PM to make climate change his highest priority. Europe has been reeling from record-breaking heat waves which gave great weight to the argument. Just this morning, Alaska posted of 58.1F (14.5C) – equivalent to an Arctic heatwave.
High pressure is building politically and meteorologically. The data in the Christian Aid report showcased the fact that women and young people were more inclined to rank the importance of climate above their concerns about Brexit. Considering the changes within workplace demographics (with younger members enrolling into DC pension schemes), how long before their views demand actions?
Members are the beating heart that has entrusted the head (pension fund trustees) to invest wisely to build their future wealth and closely consider the environment. If the heart wants ESG initiatives, then we as an industry must figure out how to deliver it.
Pension funds (and the wider industry) harness the financial muscle (about £2 Trillion) which can be brought to bear on investment choices and decisions. By demanding their investments meet specific sustainable and climate criteria, pension funds have the power to make real, meaningful, and lasting change.
We have over 60 trustees who represent over £280 billion in assets under management who have taken up the cause and have signed the mallowstreet Climate Charter. They have signed in their own personal capacity and have pledged to:
- To ask, “What is the impact on the climate?” for each and every investment that is proposed.
- To demand that the carbon impact of every investment is measured and reported on by our managers. We will work actively and collaboratively to develop complete carbon measurement standards.
- To insist that each of our investment managers actively engage with corporate boards underlying our investments, so that every company develops and discloses both a complete measure of their carbon impact and a clear business plan to transition to a low carbon future.
- To review, and ultimately recommend the termination of, any investment manager that fails to support and actively engage in stewarding the transition to a low carbon future.
The obligation of the trustee is to the future of their members, in today’s climate, it means both fiscally and environmentally.
Sign with the head for a better heart.
