Are your pension contributions being used to invest in fossil fuels?
It could be happening without you even realising it…
‘Welcome to Hell’ - children play next to Iraq’s biggest oil field
photo credit: https://geographical.co.uk/science-environment/life-and-times-iraq-oil-fields,
As we enter the 2024 English cricket season, the 6th April was a new tax year and a chance for cricket fans, staff, players, administrators and volunteers to review their pension schemes. What is the relevance? Your pensions won’t be much good for you if climate change continues to wreak havoc on our planet before you retire! Perhaps a small amount of time spent now reviewing your pension contributions, maybe just an hour depending on your circumstances, will ensure your funds are invested with a sustainable future in mind for the rest of the year or beyond.
“I’m insignificant as only £100 per month goes into my pension”
Remember that ‘small acorns grow into large oak trees’, thus our collective little efforts can go a long way to ensure oak trees are here in the future. The UK has 33 million employed and self-employed people, so if 20 million of them invest £100 per month into UK pension schemes, that is £2,000,000,000 (£2 billion) collectively invested each month. If just 5% of that is in fossil fuel companies, it means £100,000,000 (£100 million) per month, or £1,200,000,000 (£1.2 billion) every year is directly supporting corporate greenhouse gas expansion plans!
We are not luddites as we know the world currently relies on fossil fuels, but we are concerned about the hypocrisy of expanding fossil fuel extraction with all the science advising against it. The UK government continues to support extraction, and the most influence you have there is by contacting your local or national representatives. Oil companies admit their wealth is in the ground, but they won’t listen to small shareholders, and they have no reason to accelerate changes as their revenues continue.
It is unlikely that the directors and major shareholders of fossil fuel companies live near extraction, refining or flaring sites. If climate change does not directly affect them, they are unlikely to see the need for change, but you can choose not to invest in their companies.
What are you supporting by investing in these companies?
Think about it, your investments are funding their future extraction of fossil fuels and greenhouse gas emissions, plus their director’s salaries, bonuses, pension contributions, share options, or other profit related incentives. The established energy companies admit their wealth is in the ground, which is why they want to convince us that their year 2050 pledges will be fine, but their current decision makers will be retired or deceased 26 years from now. You can see corporate director’s remuneration reports online, where the share price affects their wealth, and you can visualise Nero fiddling while Rome was burning!
Aren’t fossil fuels companies reducing their emissions?
Shell is currently in a Dutch court trying to repeal a ruling forcing them to cut greenhouse gas emissions. They have backtracked on their reduction pledges two years in a row, and your pension fund could be invested in Shell or other companies doing similar things.
Apart from Shell, some of the largest energy companies in the world by stock market size are listed below, and it is likely that non-sustainable investment or pension funds have shares in these companies. These are among the largest 150 global companies, thus there are many other companies available which you can still invest in, including many whose products or services you use every day. Of course, you might have other sectors or companies you want to avoid or support, everyone has different views!
Saudi Aramco, Saudi Arabia
TotalEnergies, France
Exxon Mobile, USA
ConocoPhillips, USA
Chevron, USA
Nextera Energy, USA
PetroChina, China
CNOOC, China
Shell, UK
BP, UK
What can you do for positive change?
Find out if your investments are supporting fossil fuel companies, then decide if you want to continue or redirect your funds towards other companies or sectors. There are 164 hours in a week, and just one hour of your time could impact your contributions for the rest of the year or beyond. Make enquiries to see if there are sustainable, responsible, or ethical options available.
Company pensions and Automatic Enrolment plans, contact your scheme administrators, there may be choices depending on each scheme’s rules
Personal pensions, ISAs, or other funds, contact your plan manager or financial adviser, there might be several options available depending on your needs and risk profile
Ask your parents and other close family about their pension funds, ISAs or legacy investments, do they know which companies and industries they invest in?
If you have Trustee Investments on behalf of children; injury victims; vulnerable people; legacy plans; or other purposes, contact your plan manager or financial adviser for choices
Our message should not be construed as giving any advice, it is purely to create awareness through education, allowing people to make their own decisions, so we hope this helps if you were not aware of it.
